Perfect competition produces an efficient allocation of resources because

Question

Accepted Answer

Free entry and exit plus perfect information ensure that the equilibrium price is equal to the marginal social cost and to the marginal social benefit at the equilibrium quantity

Answer

There are only a few demanders and a few suppliers so that the equilibrium price is equal to marginal benefit of one of them and it is greater than the marginal social cost to allow for some positive economic profit

Answer

There are only a few suppliers and many demanders

Answer

There are only a few suppliers so the market avoids chaotic changes in the number of suppliers ,

Answer

The government does not fix prices and market participants do not need its support since the pursuit of self interest by every one of them ends up promoting the public interest

Crowdly

Perfect competition produces an efficient allocation of resources because

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