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Perfect Competition And Sustainability

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Executive Summary

Adding sustainability to the conditions of Perfect Competition (PC) results in a meaningful benchmark, especially in the context of pursuing sustainability as a policy goal. On this basis, some standard explanations involving the comparisons with imperfect competition can be questioned. But, importantly the recognition of sustainability besides the standard conditions of PC provides the basis for expositing voluntary environmental stewardship. A central tenet in microeconomics is that the perfectly competitive market equilibrium dictates the maximization of net benefits. This equilibrium further coincides with a well functioning system of private property rights.

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