Asked by Melissa Shular on Jul 15, 2024
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What is the basic conclusion that is to be drawn from the chapter? On what two facts is this conclusion based?
Basic Conclusion
A fundamental finding or decision reached after an analysis or investigation.
- Recognize the attributes of a wholly competitive market in a state of long-run equilibrium.
- Distinguish between the concepts of productive efficiency and allocative efficiency within the framework of a purely competitive market.
- Clarify the notion and ramifications of creative destruction in market behavior.
Verified Answer
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zachary walczynskiJul 18, 2024
Final Answer :
The basic conclusion is that after all long-run adjustments are completed in a purely competitive industry, product price will be exactly equal to, and production will occur at, each firm's minimum average total cost. The two facts that this conclusion is based on are (1)firms seek profits and shun losses, (2)under pure competition, firms are free to enter and leave an industry.
Learning Objectives
- Recognize the attributes of a wholly competitive market in a state of long-run equilibrium.
- Distinguish between the concepts of productive efficiency and allocative efficiency within the framework of a purely competitive market.
- Clarify the notion and ramifications of creative destruction in market behavior.