Competitive markets result allocative efficiency because they:

Question

Quizplus · Accepted Answer

Competitive markets result in allocative efficiency because they ensure that goods and services are produced at the lowest possible cost and sold to the consumers who value them the most. This maximizes the total benefits from exchange and results in an efficient allocation of resources. While competitive markets may generate benefits for consumers and distribute resources in a relatively equitable way, these outcomes are not the primary drivers of allocative efficiency.

Competitive Markets Result Allocative Efficiency Because They