Perhaps most significant of all, we invented the Internet. Americans have seen firsthand, in long-distance and in the prices and choices for the telephones that we now buy for our homes, that competition generally will bring us the best products with the mix of quality, price and service that fits what consumers want. But faith in the free market overall doesn't mean that we have to be blind to areas where the market isn't working as well as it should, or where it just plain fails to deliver the right result for our society. The unchecked free market, for example, would result in telephone service for the most rural parts of America being priced so high that people simply couldn't afford telephone service. Classical economic models of perfect competition assume that everyone in the marketplace, the producers of goods and services and the buyers, have perfect information.
All producers know exactly what their customers want.
All customers know exactly what they want and the range of options. And they can all precisely evaluate the cost and benefit tradeoffs. But these assumptions are far off from the real world. This gap usually defines the difference between economic theory and business opportunity. Fortunes are made in the business world when one entrepreneur sees a need, can enter the market, interact with customers, and fill the need.