The perfectly competitive market structure benefits consumers because
A)firms do not produce goods at the lowest possible price in the long run.
B)firms are forced by competitive pressure to be as efficient as possible.
C)firms add a much smaller markup over average cost than firms in any other type of market structure.
D)firms produce high-quality goods at low prices.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms are forced to be as efficient as possible in order to keep up with the competition. This leads to lower prices for consumers as firms strive to lower their costs and increase their output. While firms may not produce goods at the lowest possible price in the long run, they are still under pressure to keep prices competitive in the short run, which benefits consumers. Firms in perfectly competitive markets also tend to add a smaller markup over average cost compared to firms in other market structures, which can also lead to lower prices for consumers. However, there is no guarantee that firms in a perfectly competitive market will produce high-quality goods at low prices, as quality and price are determined by a variety of factors beyond market structure.

The Perfectly Competitive Market Structure Benefits Consumers Because