ABSTRACT
Real competition is about winning. There are at least two flaws in this justification for trying to make competition perfect. The first is the "welfare flaw", perfect competition, if it happened, wouldn't actually maximize welfare. The second is that no real market would actually deliver marginal cost pricing. Edward Chamberlin focused almost exclusively on monopolistic competition, leaving others, notably Edward Mason, to develop the theories underlying what became known as "imperfect" competition. Economists teaching at the undergraduate level tend to take a very simplistic view of monopolistic competition, starting from the assumptions, firstly, that apart from a single differentiating factor all the firms in an industry are identical; and secondly, that there are no sunk costs of entry to an industry. Industrial Organization economists generally continue to use the concept of the representative consumer in their analysis, replacing a diverse real consumer population with an equal number of identical "representative" consumers.
