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how does perfectly competitive markets use or do not use resources efficiently.?
02-19-2014, 12:52 PM
Post: #2
 
perfectly competitive market uses the resource until private marginal benefit equal private marginal cost (since both of them equal price). This is means maximum difference between benefit and cost. And that means efficiency if private costs and benefits equal social ones. If they are not (i.e. if there are externalities), market witll use the resource inefficiently.

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[] - Bored Goblin - 02-19-2014 12:52 PM

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