Assuming pure competition and long-run equilibrium are possible in the real world, what impact would this have on efficiency?

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Expert Solution

A perfeclty competitive firm in the market in the long run will have maximum efficiency in the market, A firm in the perfect industry is productive and allocative efficient, it maximises the economic efficiency in the market.

Here, the price is set at the point where the marginal cost is equal to the price and it is economic efficient because they are producing at the point where the ATC is the lowest. if all the market becomes perfeclty competive then the economic efficiency in the whole market will be maximised.

Rahul Sunny answered 1 year ago

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