Mobility of resources ensures productive efficiency in a perfectly competitive market.

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Mobility of resources refers to the ability of resources (e.g. labor and capital) to move between different firms and industries in response to changes in prices and demand. In a perfectly competitive market, firms have no market power and compete solely on price, driving prices down to the level of marginal cost and ensuring productive efficiency. If resources are able to move freely, firms can easily adjust to changes in demand and allocate resources efficiently, resulting in optimal production levels and minimal waste. Therefore, mobility of resources is a key characteristic of a perfectly competitive market and essential for productive efficiency.

Mobility of Resources Ensures Productive Efficiency in a Perfectly Competitive