A perfectly competitive industry achieves allocative efficiency in the long run.Allocative efficiency means

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Allocative efficiency occurs when firms produce up to the point where the price of the good equals the marginal cost of producing the last unit. This ensures that resources are allocated efficiently and there is no deadweight loss in the market. In a perfectly competitive industry, each firm faces a horizontal demand curve and is a price taker, so they cannot influence the market price. Thus, they have to adjust their output level to the market price, which leads to allocative efficiency in the long run.

A Perfectly Competitive Industry Achieves Allocative Efficiency in the Long