In the short-run,the efficient industry outcome under perfect competition occurs at the level of output where _____.

Question

Quizplus · Accepted Answer

In perfect competition, the industry outcome is efficient in the short-run when marginal benefit (MB) equals marginal cost (MC). At this level of output, the price that consumers are willing to pay for the good (which equals marginal benefit) is equal to the cost of producing the last unit of the good (which equals marginal cost). Therefore, neither consumers nor producers can benefit by producing or consuming more or less of the good at this level of output. This produces the allocative efficiency which is the efficient industry outcome under perfect competition.

In the Short-Run,the Efficient Industry Outcome Under Perfect Competition Occurs