A perfectly competitive industry is said to be efficient because the:

Question

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In a perfectly competitive industry, the firms have no market power, so they must accept the market price for their output. This market price is determined by the intersection of the industry's supply and demand curves. In the long run, firms in the industry adjust their production levels and inputs to minimize their average total cost of production. This leads to a situation where the industry produces the desired quantity of output at the lowest possible cost. Therefore, the average total cost of production of the industry's output is minimized in the long run, making it efficient.

A Perfectly Competitive Industry Is Said to Be Efficient Because