The reason economists use the term "perfect" for firms that are able to charge each customer a price exactly equal to the price the customer is willing to pay is because it
A) is a perfect example of capitalism.
B) always works perfectly,just like the theoretical model.
C) describes a market outcome that produces no deadweight loss.
D) charges each customer his or her own perfect price.
E) works perfectly to benefit the producers selling the product.

Question

Quizplus · Accepted Answer

The term "perfect" in economics is used to describe a market outcome that produces no deadweight loss, which occurs when the total surplus in a market is not maximized. In a perfectly competitive market, each firm charges the exact price that a customer is willing to pay, resulting in no deadweight loss. This is because the price is equal to the marginal cost of production, and all resources are being used efficiently.

The Reason Economists Use the Term "Perfect" for Firms That