In pure competition, resources are optimally or efficiently allocated when production occurs at the output level where P = MC.

Question

Quizplus · Accepted Answer

In pure competition, the price (P) equals marginal cost (MC) at the equilibrium output level, indicating that resources are allocated efficiently, as firms produce up to the point where the cost of producing an additional unit equals the revenue gained from selling it.

In Pure Competition, Resources Are Optimally or Efficiently Allocated When