Anonymous asked in Social ScienceEconomics · 1 decade ago

perfect competition & monopoly? efficient or not?

Why or Why not is a perfect competition & monopoly efficient or inefficient?


allocative & cost efficieny to be exact

2 Answers

  • 1 decade ago
    Favorite Answer

    Remember, allocative efficiency is when P=MC, so perfect competition is efficient and monopolies are not. Hope that helps.

  • Anonymous
    1 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

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