With no externalities a competitive market will tend distribute resources:
(i) efficiently
(ii) fairly
(iii) equally

Question

Quizplus · Accepted Answer

A competitive market is said to distribute resources efficiently when there are no externalities present. This means that resources are allocated in a way that maximizes total surplus, or the sum of consumer and producer surplus. Fairness and equality are not necessarily outcomes of an efficient market allocation.

With No Externalities a Competitive Market Will Tend Distribute Resources