Pure competition and efficiency, Microeconomics

Allocative efficiency criteria are satisfied by the competitive model.  Because P = MC, in each market in the economy there is no over- or under- allocation of resources in this economy.  This is due to the cost of production for the last unit of production is what shows supply, and that cost of production includes only the engineering costs.  Though, this result is obtained only if all industries in that economic system are purely competitive.  This is the contribution of the models of distribution formed by economists working in the marginalists traditions.  The problem is that this is economic theory that is not essentially supported by empirical evidence.


Posted Date: 4/19/2013 4:01:23 AM | Location : United States

Related Discussions:- Pure competition and efficiency, Assignment Help, Ask Question on Pure competition and efficiency, Get Answer, Expert's Help, Pure competition and efficiency Discussions

Write discussion on Pure competition and efficiency
Your posts are moderated
Related Questions
Implications for the Role of Economic Theory : Like the schedule for the marginal efficiency of capital, expectations about the future market rate of interest underlie the li

The raspberry growing industry is a perfectly competitive industry. The firms in the industry have a U-shaped LAC, minimum average cost is $8 and the minimum efficient scale is 4 u

(a) What  are the problems associated with R 2 and how can adjusted R 2 solve them? (b) If the regressors  in an equation are highly correlated, which measures can be used to

why does gap between the ATC curve and the AVC curve decreases as the level of output increases

#question.theories of cost

What are the possible advantages of free trade? Firms a)  Specialisation and enhanced use of comparative advantage b)  Possibility of advantages of scale c)  Spread

Ask question #what is an indifference curveMinimum 100 words accepted#

Suppose the demand curve for a consumer for coffee is: Q = 6 - 2P, where Q represents the number of cups per day and P is the price of coffee per cup.  1.  Suppose the con

explain how a perfact market responds to changes in consumer demand?

what is the effect on the market for dvd players if the price of dvd rises