The characteristics of a perfectly competitive market help ensure that the goods produced are those that consumers want. This demonstrates the concept of

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Allocative efficiency occurs when the production of goods aligns with consumer preferences, ensuring that resources are allocated to produce the goods and services most desired by consumers. In a perfectly competitive market, the forces of supply and demand lead to this outcome, as producers respond to consumer demands to maximize profits.

The Characteristics of a Perfectly Competitive Market Help Ensure That