In the short-run, the efficient industry outcome under perfect competition occurs at the level of output where:

Question

Quizplus · Accepted Answer

In the short-run, the efficient industry outcome under perfect competition occurs at the level of output where marginal benefit (MB) equals price (P) equals marginal cost (MC). This is because at this level of output, the social benefit (MB) of producing one more unit of the good is equal to the social cost (MC) of producing that unit. Therefore, producing any more or less than this level of output would result in a loss of social welfare.

In the Short-Run, the Efficient Industry Outcome Under Perfect Competition