The perfect competition price system is the most efficient because it equates MC = P = MU.

Question

Quizplus · Accepted Answer

In perfect competition, firms produce at the point where price (P) is equal to marginal cost (MC) and where marginal utility (MU) is equal to price (P). This ensures that resources are allocated efficiently and that consumers receive the greatest satisfaction from the goods and services produced. Therefore, the perfect competition price system is the most efficient.

The Perfect Competition Price System Is the Most Efficient Because