Asked by Nicholas Boren on Jul 23, 2024
Verified
Under perfect competition, firms produce the ________ level of output because price equals marginal cost.
A) greatest
B) most costly
C) equitable
D) efficient
Marginal Cost
The budget allocation for the production of an additional unit of a product or service.
Perfect Competition
A market structure characterized by many buyers and sellers, free entry and exit, and a homogeneous product, leading to no single entity having market power.
- Learn about the essential aspects of perfect competition and their influence on the efficiency of manufacturing goods and assigning resources.
Verified Answer
AS
Anthony SanchezJul 23, 2024
Final Answer :
D
Explanation :
Under perfect competition, firms produce the efficient level of output because the condition for efficiency in production is that price equals marginal cost. This ensures that resources are allocated in a way that maximizes total surplus in the economy.
Learning Objectives
- Learn about the essential aspects of perfect competition and their influence on the efficiency of manufacturing goods and assigning resources.
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