In the argument for why perfect competition is allocatively efficient, the price that people are willing to
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In the argument for why perfect competition is allocatively efficient, the price that people are willing to pay represents the gains to society and the marginal cost to the firm represents the costs to society. Can you think of some social costs or issues that are not included in the marginal cost to the firm? Or some social gains that are not included in what people pay for a good?
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Perfect competition is often described as allocatively efficient because in this idealized market structure the price consumers are willing to pay demand curve is equal to the marginal cost of product...View the full answer
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John Kimutai
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