perfect competition & monopoly? efficient or not?
Why or Why not is a perfect competition & monopoly efficient or inefficient?
allocative & cost efficieny to be exact
- 1 decade agoFavorite Answer
Remember, allocative efficiency is when P=MC, so perfect competition is efficient and monopolies are not. Hope that helps.
- Anonymous1 decade ago
perfect competition is efficient. firms are price takers, so their profit-maximizing output is socially efficient (marginal cost is equal to marginal benefit)
monopolist controls price, so a monopoly would produce less than competition, and costs will be than socially optimal