Final answer:
Yes, under the theoretical conditions of perfect competition, markets achieve Pareto efficiency due to the simultaneous presence of productive and allocative efficiencies.
Step-by-step explanation:
Under perfect competition, markets do achieve Pareto efficiency. This is because in a perfectly competitive market, goods and services are produced and sold at the lowest possible average cost, reflecting productive efficiency. Moreover, the price in the market equates to the marginal cost of production, which implies allocative efficiency. In essence, no one can be made better off without making someone else worse off, fulfilling the conditions of Pareto efficiency.
However, it's important to recognize that perfect competition is a theoretical benchmark rather than a common reality. In structures like monopoly, monopolistic competition, and oligopoly, firms typically do not operate at the minimum of average cost and do not price their products equal to marginal cost. As a result, these market forms do not achieve productive and allocative efficiency, diverging from the ideal of perfect competition. Therefore, only under the strict conditions of perfect competition do markets reach Pareto efficiency.