When economists say that markets are efficient,what are they assuming about markets
A)They are perfectly competitive.
B)They are not for illegal products.
C)They are regulated by the government.
D)They are monopolistic.

Question

Quizplus · Accepted Answer

When economists say that markets are efficient, they are assuming that they are perfectly competitive. This means that there are many buyers and sellers, no single entity controls the pricing, there is free entry and exit, and there is perfect information available to all parties involved. In a perfectly competitive market, prices reflect the supply and demand of goods and services, which leads to allocative efficiency.

When Economists Say That Markets Are Efficient,what Are They Assuming