Question

the perfectly competitive market structure benefits consumers because group of answer choices firms do not produce goods at the lowest possible price in the long run. firms produce high quality goods at low prices. firms are forced by competitive pressure to be as efficient as possible. firms add a much smaller markup over average cost than firms in any other type of market structure.

Answer 1

In a perfectly competitive market, firms are compelled to achieve maximum efficiency, resulting in goods being produced and sold at the lowest possible average cost. This leads to both productive and allocative efficiency, providing benefits like lower prices and higher quality for consumers.

Step-by-step explanation:

The perfectly competitive market structure benefits consumers because firms are forced by competitive pressure to be as efficient as possible. This efficiency results in productive efficiency, which means companies produce goods without waste and at the lowest point on the average cost curve in the long run.

Such markets are characterized by a level playing field where numerous firms sell homogeneous products, leading to goods being produced and sold at the lowest possible average cost, benefitting consumers with lower prices and higher quality products.

Unlike other market structures such as monopolistic competition, where firms face less pressure to minimize costs due to product differentiation and advertising, perfectly competitive markets push firms toward allocative efficiency where the quantity of output reflects consumer preferences and marginal costs.