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    can anyone answer the title question?

    i'm having trouble coming to grips mainly with why it is efficient in the short run as my notes seem to be telling me the opposite.

    i don't know what diagrams are associated with it either

    thanks in advance to any responses, any help at all would be much appreicated!

    i'm completely lost when it comes to economics and i've been trying for days to get my head round this is as most texts just tel me what perfect competition is in the long and short run, not why.

    thanks again
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    anyone?
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    It allocates welfare more efficentley, you may want to contrast this with a monopoly and pointout where it fails to do this.

    EDIT: This will be useful: http://www.thestudentroom.co.uk/show....php?t=1486955
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    I started typing out everything I knew but then I found this.
    Enjoy.

    1.Allocative efficiency: In both the short and long run in perfect competition we find that price is equal to marginal cost (P=MC) and thus allocative efficiency is achieved. At the ruling market price, consumer and producer surplus are maximised. No one can be made better off without making some other agent at least as worse off – i.e. the conditions are in place for a Pareto optimum allocation of resources.

    2.Productive efficiency: Productive efficiency occurs when the equilibrium output is produced with average cost at a minimum. This is not achieved in the short run, but is attained in the long run equilibrium for a perfectly competitive market.

    3.Dynamic efficiency: We assume that a perfectly competitive market produces homogeneous products – in other words, there is little scope for innovation designed purely to make products differentiated from each other and thereby allow a supplier to develop and then exploit a competitive advantage in the market to establish some monopoly power.

    Also it is X-efficient because it incurs no unnecessary costs of production.

    http://www.economicshelp.org/microes...ciency-pc.html

    Use the first diagram. the above applies where AC/MC/MR meet
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    (Original post by Ideal.)
    It allocates welfare more efficentley, you may want to contrast this with a monopoly and pointout where it fails to do this.

    EDIT: This will be useful: http://www.thestudentroom.co.uk/show....php?t=1486955
    hey, thanks for the help! but did u realise the link is just a link back to this page?
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    (Original post by I'm A Procrastinator :()
    I started typing out everything I knew but then I found this.
    Enjoy.

    1.Allocative efficiency: In both the short and long run in perfect competition we find that price is equal to marginal cost (P=MC) and thus allocative efficiency is achieved. At the ruling market price, consumer and producer surplus are maximised. No one can be made better off without making some other agent at least as worse off – i.e. the conditions are in place for a Pareto optimum allocation of resources.

    2.Productive efficiency: Productive efficiency occurs when the equilibrium output is produced with average cost at a minimum. This is not achieved in the short run, but is attained in the long run equilibrium for a perfectly competitive market.

    3.Dynamic efficiency: We assume that a perfectly competitive market produces homogeneous products – in other words, there is little scope for innovation designed purely to make products differentiated from each other and thereby allow a supplier to develop and then exploit a competitive advantage in the market to establish some monopoly power.

    Also it is X-efficient because it incurs no unnecessary costs of production.

    http://www.economicshelp.org/microes...ciency-pc.html

    Use the first diagram. the above applies where AC/MC/MR meet
    thank you so much for the help! greatly appreciated!
 
 
 
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