A Perfectly Competitive Market Results in Efficiency Because

question 35

Multiple Choice

A perfectly competitive market results in efficiency because

• A)Price is driven down to minimum ATC.
• B)Price rises high enough to equal marginal cost.
• C)Zero economic profit is achieved.
• D)MC < P.

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Definitions:

Economic Perspective

A viewpoint that analyzes how individuals make decisions based on scarcity and the incentives that influence those decisions.

Marginal Costs

The uptick in full pricing incurred by the generation of another unit of a product or service.

Marginal Benefits

The increase in utility or satisfaction from consuming or producing an extra unit of a good or service.

Post Hoc

A logical fallacy that assumes that if one event occurs after another, then the first event must have caused the second.