1)What are the differences in the assumptions between the industrial organizations of perfect competition and monopoly?

2)What is an intervention in economics?

1)Monopoly and perfect competition are at two complete ends of the spectrum in terms of market structures. Two of the main assumptions in perfect competition is that there are "many" firms, which results from limited barriers to entry that would have prevented new firms from entering the market. With monopolies, on the other hand, it is assumed that there are some strong barriers to entry that prevent any firms from entering the market. In both markets, however, it is assumed that there is perfect information, which means that all buyers and all sellers are fully aware of all options, technologies, etc.

2)Intervention in economics is the action taken by the government or an international body to impact the economy past the underlying policies. It is the government taking the decisions making power of an individual on their spending and actions in the economy. Interventions in the economy arise when governments try to deal with inequalities in the markets by providing regulations, providing subsidies, and taxation.

Whenever the government suspects inefficiencies in the market, it steps in to set conditions that will ensure that the markets goes back to being efficient. For example, if the supply of certain commodities is low, it will introduce rationing as a measure to curb this and regulate the quantity of getting to consumers. Subsidies are also another method the governments intervene; this way, it prevents its industries from failing. It also tries to maximize social welfare by crushing cartel monopolies that limit infrastructure development.

Without interventions, businesses may produce negative externalities without consequences; thus, interventions help minimize these externalities.