A condition necessary for a market to achieve economic efficiency is that the market:

Question

Quizplus · Accepted Answer

Economic efficiency requires that the supply curve includes all opportunity costs imposed on society of producing the good. This is because economic efficiency occurs when the marginal benefit of the good is equal to the marginal cost of producing it. In order for the supply curve to accurately reflect the marginal cost of production, it must include all opportunity costs, including those imposed on society. If these costs are not included, then the market may produce too much of the good, leading to inefficiency.

A Condition Necessary for a Market to Achieve Economic Efficiency