Explain why, when all markets are competitive and in equilibrium, all three conditions for efficiency are satisfied. Does this result indicate that society’s welfare is maximized?
Answer to relevant QuestionsWhat economic forces might explain why the relative price of telephone services fell while the relative price of medical care increased between 1983 and 2013?If Cisco has a monopoly in the server market, what efficiency condition is violated? Would the regulation of Cisco and the elimination of Cisco’s profit lead to a more efficient allocation of resources? Will all members of ...What two characteristics define a public good? Which of the following are public goods: parks, police services, welfare payments to the poor, production of energy, space exploration? Suppose there are three consumers—two “hawks” and one “dove.” The dove receives negative benefits from (i.e., is harmed by) national defense, but the hawks value defense. Show graphically how an efficient output of ...Explain why efficiency in production is not realized if both refineries in Figure are limited to emitting 100 pollution units each.
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