Give reasons or explain the following statement:
Assumptions of micro economics are unrealistic.
Assumptions of micro economics are unrealistic as they do not exist in real life. Micro economics assume that there is full employment, laissez fair policy, pure capitalism, perfect competition, etc. All these assumptions neglects the dynamic and changing environment and makes the micro economic study static. Thus, we say that the assumptions are unrealistic in nature.
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- Assumption of Micro Economic Analysis