Perfect competition Flashcards
1
Q
Features of a perfectly competitive market
A
Many small firms, homogenous goods, all firms are price takers, perfect knowledge, freedom of entry/exit, completely mobile factors of production
2
Q
Producitve efficiency ?
A
Yes, Q is at lowest point of LRAS
3
Q
Allocative efficiency ?
A
Yes, Q is where P=MC
4
Q
dynamic efficiency ?
A
No, there is no means or incentive to be dynamically efficient
