Pure competition and efficiency, Microeconomics

Assignment Help:

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.

 


Related Discussions:- Pure competition and efficiency

Short run, A film studio in Hollywood produces movies according to the fun...

A film studio in Hollywood produces movies according to the function q = F(K;L) = (2=100)K^0.5L^0.5 In the short run, capital (studios, gear) is xed at a level of 100. It costs $

Define price elasticity of demand, What is the mathematical definition of p...

What is the mathematical definition of price elasticity of demand The price elasticity of demand is the percentage alters in quantity demanded divided by the percentage change

Production function, what are the properties of cob-douglas production func...

what are the properties of cob-douglas production function

What are the properties of the profit function, What are the properties of ...

What are the properties of the profit function? Properties of the Profit Function: The properties specified below follow solely by the assumption of profit maximization. No

Consumer behaviour, compare and contrast between cordinal and ordinal appr...

compare and contrast between cordinal and ordinal approaches

Money demand function, what are the values of real money supply and the cur...

what are the values of real money supply and the current price level

Supply of labour, use a graphical illustration to briefly describe what the...

use a graphical illustration to briefly describe what the influence of an increase in immigrants would be on the market supply of labour

Effect of tax on industry''s long run supply curve, The Industry's Long Run...

The Industry's Long Run Supply Curve *  The Effects of Tax - Earlier we studied how firms respond to taxes on an input. - Now, we will consider how firm responds to tax o

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd