In a perfectly competitive market, producers efficiently use their scarce resources to produce what consumers want, in order to achieve:

Question

Quizplus · Accepted Answer

In a perfectly competitive market, producers are incentivized to produce at the minimum point on their average total cost curve to remain competitive. At this point, the price (which is equal to the marginal cost) equals the marginal benefit (value) to consumers, resulting in allocative efficiency. This means that the resources are allocated to produce the goods and services that consumers want the most, maximizing their total welfare. Therefore, option B- Allocative Efficiency is the correct choice. Option A- Productive Efficiency and C- Economic Efficiency are also essential requirements of a perfectly competitive market, but they do not directly relate to the question. Option D- Constant Returns to Scale is not directly related to the concept of a perfectly competitive market.

In a Perfectly Competitive Market, Producers Efficiently Use Their Scarce