In the model of perfectly competitive markets, the market outcome is allocatively efficient because economic profits are maximized the sum of consumer and producer surplus is maximized average total cost is minimized for each firm all firms break even in the long run all firms are price takers

In the model of perfectly competitive markets, the market outcome is allocatively efficient because economic profits are maximized the sum of consumer and producer surplus is maximized average total cost is minimized for each firm all firms break even in the long run all firms are price takers

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter9: Price Takers And The Competitive Process

Section: Chapter Questions

Problem 3CQ

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Question

In the model of perfectly competitive markets, the market outcome is allocatively
efficient because
economic profits are maximized
the sum of consumer and producer surplus is maximized
average total cost is minimized for each firm
all firms break even in the long run
all firms are price takers

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