Which of the following is not a necessary condition for economic efficiency in competitive markets?
A)The marginal rates of substitution of all goods across all consumers are equal.
B)The prices of productive inputs are the same across all productive uses.
C)The marginal rates of technical substitution are the same across all firms and industries.
D)The marginal rates of substitution of two goods across all consumers will equal the marginal rates of transformation of the two goods.

Question

Quizplus · Accepted Answer

Economic efficiency in competitive markets does not require that the prices of productive inputs be the same across all productive uses. Instead, it requires that resources are allocated in a way that maximizes total surplus, which involves conditions related to marginal rates of substitution and transformation, not uniform input prices across all uses.

Which of the Following Is Not a Necessary Condition for Economic