Asked by Heidi Canaveral on Jul 23, 2024
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It is because firms consciously try to balance social costs and benefits that efficiency conditions of perfect competition come about.
Social Costs
The total cost to society, both direct and indirect, arising from the production or consumption of goods and services, including externalities.
Perfect Competition
A market structure characterized by an infinite number of buyers and sellers, homogeneous products, no barriers to entry or exit, perfect information, and no individual buyer or seller having any influence on the market price.
- Identify the circumstances in which markets are capable of attaining efficiency.
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Learning Objectives
- Identify the circumstances in which markets are capable of attaining efficiency.
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