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    Productive efficiency and allocative efficiency are two concepts achieved in the long run in a perfectly competitive market. These are the two reasons why we call them “perfect.” How would you use these two concepts to analyze other market structures and label them “imperfect?”

    Perfect competition is considered to be “perfect” because both allocative and productive efficiency are met at the same time in a long-run equilibrium. If a market structure results in long-run equilibrium that does not minimize average total costs and/or does not charge a price equal to marginal cost, then either allocative or productive (or both) efficiencies are not met, and therefore the market cannot be labeled “perfect.”

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Questions & Answers

what is another name for inflation
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the meaning of nitty-gritty
What are the theories of economic development
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what are the four basic assumption of perfect competition. explain in words what they imply for a perfectly competitive firm.
Douglas Reply
The four basic assumptions of a perfectly competitive market are as follows: ⋅⋅ The product is identical i.e. each and every firm in this industry is selling an exactly same product without any product differentiation. ⋅⋅ There are many sellers and buyers which means no individual buyer or seller ha
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it refers wants that are left unsatisfied in Oder satisfy another more pressing need
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it is where by a labour moves from one place to another
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what is mobility of labour
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help to know how our government operates in which system
1. To solve economic problems. 2. To predict economic event. 3. It also offer intellectual training to students.
How price elasticity can affect the markets of certain goods
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Mental and physical ability of human being is considered as labour.
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Source:  OpenStax, Principles of economics. OpenStax CNX. Sep 19, 2014 Download for free at http://legacy.cnx.org/content/col11613/1.11
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