Explain how economic theory suggests that perfect competition among many small*firms

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imcrying
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this is due friday and i dont know where to start and what diagram i should use and how it helps small firms?

can somebody please help
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imcrying
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Explain how economic theory suggests that perfect competition among many small firms leads to an efficient allocation of resources. [15 marks]
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isthistaken
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Perfect competition: many buyers, many sellers. Firms are price-takers and there are no barriers to entry or exit from the market. The goods sold by different firms are homogenous. Firms sell at MR=MC=D. This would just be a horizontal straight line on a firm diagram and you'd need to draw a standard supply and demand diagram next to it, showing that P=MR=MC=D is at the same level as the market equilibrium.

The market is allocatively efficient; consumers are charged only the marginal cost of producing the good because if a firm tried to charge more than this their demand would fall to zero.
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laurennn.
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use a simple perfect competition diagram and point out where allocative efficiency is MC=AR
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