Which assumption leads to an efficient allocation of resources among firms?
A) Factor markets are open and competitive.
B) All firms pay different prices for identical inputs.
C) Firms behave so as to minimize their profits.
D) All of the above are correct.

Question

Quizplus · Accepted Answer

An open and competitive factor market ensures that resources are allocated efficiently among firms, as prices for inputs reflect their true scarcity and value, guiding firms to use them where they are most valued.

Which Assumption Leads to an Efficient Allocation of Resources Among