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Why Is a Perfectly Competitive Market Considered Pareto E?cient? Is

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Essay

Why is a perfectly competitive market considered Pareto e?cient? Is a monopoly also Pareto e?cient? Explain.


Definitions:

Residual Claim

A claim entitling the holder to a share of a company's income after all obligations and debts have been settled.

Total Assets

Total assets represent the sum of all assets owned by a company, indicating the resources it has at its disposal to generate revenue.

Owner's Equity

The portion of a company's total value that belongs to its owners or shareholders, calculated as the company's total assets minus its total liabilities.

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