Question

The perfectly competitive market structure benefits consumers because__________.a. firms are forced by competitive pressure to be as efficient as possible.b. firms add a much smaller markup over average cost than firms in any other type of market structure.c. firms do not produce goods at the lowest possible price in the long run.d. firms produce high-quality goods at low prices.

Answer 1

Answer:

The correct answer is a) firms are forced by competitive pressure to be as efficient as possible

Explanation:

In a perfect competition market, firms will have so much competition that they will be as efificient as possible. The definition of efficient here is determined by allocative efficiency and production efficienty.

Allocative efficiency means that in perfect competition firms will allocate resources where they work best to produce the most ouput, and production efficiency means that firms will supply exactly the amount of goods demanded by the public, making scarcity impossible.