If All the Assumptions of Perfect Competition Hold, the Result

question 10

Essay

If all the assumptions of perfect competition hold, the result is an efficient, or Pareto optimal, allocation of resources. What is necessary to prove this?

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Definitions:

Dissonance Theory

A concept that describes the discomfort felt when a person holds two or more conflicting beliefs, values, or attitudes, prompting a motivation to reduce the dissonance.

Self-Concept

The collection of beliefs and perceptions individuals have about themselves, encompassing aspects like self-image and self-esteem.

Theory of Planned Behavior

A psychological theory that predicts an individual's intention to engage in a behavior at a specific time and place, considering attitudes, subjective norms, and perceived behavioral control.

Cognitive Dissonance

The psychological discomfort experienced when holding two or more conflicting beliefs, values, or attitudes.