Perfect competition displays _______ because the social benefits of additional production, as measured by the price that people are willing to pay, are in balance with the to society of that production.

Question

Quizplus · Accepted Answer

Allocative efficiency occurs in perfect competition because the price (reflecting the social benefits of additional production) equals the marginal cost (reflecting the cost to society of that production), ensuring that resources are allocated in the most efficient way.

Perfect Competition Displays _______ Because the Social Benefits of Additional