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When there is allocative and productive efficiency, there is an efficient market equilibrium, allocative efficiency is when the products that are most wanted are produced, this is achieved when price equals marginal cost, productive efficiency is achieved when the firm is producing on the lowest point on the lowest average cost curve, this is also called the point of technical efficiency, both allocative and productive efficiency lead to an optimum allocation of resources and economic efficiency is achieved, though, this is thought to exist only in a perfectly competitive market and is lacking in other markets because monopolies and oligopolies usually have their prices above marginal cost and that is not an efficient allocation of resources and because other markets may lack the incentive to produce at the lowest cost
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Is a perfect market equilibrium always Pareto efficient?
No, a perfect market equilibrium is not always Pareto efficient. While a perfect market equilibrium maximizes overall economic welfare, it may not necessarily lead to a Pareto efficient allocation of resources where no one can be made better off without making someone else worse off.
What is Market equilibrium?
Market equilibrium is this situation when market demand is equal of market supply
Why will market equilibrium be re-established once disturbed?
It was found experimentally that Market has to re-establish Equilibrium via Market mechanism. Such that Market equilibrium is a desired status in the market where both suppliers and Consumers will tend re-establish market equilibrium (through demand & Supply) undeliberately.
Equilibrium and economies scale in market economy?
Equilibrium and economies scale in market economy
What does the long run perfect competition graph illustrate about the market structure and equilibrium in the industry?
The long run perfect competition graph shows that in a perfectly competitive market, firms earn zero economic profit in the long run. This indicates that the market is efficient and in equilibrium, with prices equal to costs and resources allocated optimally.
What is meant by the expression efficient market?
what is meant by the expression efficient market.briefly explain the different forms of efficient market
Is a perfect market equilibrium always Pareto efficient?
No, a perfect market equilibrium is not always Pareto efficient. While a perfect market equilibrium maximizes overall economic welfare, it may not necessarily lead to a Pareto efficient allocation of resources where no one can be made better off without making someone else worse off.
What is meant by market failure?
There are two similar but significantly different definitions of "market failure":A situation where the motivations of market-actors prevent the market from reaching maximally efficient equilibrium over timeA situation in which allocation of goods and services by a free market is currently not maximally efficient at a given time.The first definition is the more meaningful definition in relation to government policy.An often seen incorrect definition of market failure is when the quantity of a product demanded by consumers is not equal to the quantity supplied by suppliers. That is instead called a shortage or surplus.
What is Market equilibrium?
Market equilibrium is this situation when market demand is equal of market supply
Why will market equilibrium be re-established once disturbed?
It was found experimentally that Market has to re-establish Equilibrium via Market mechanism. Such that Market equilibrium is a desired status in the market where both suppliers and Consumers will tend re-establish market equilibrium (through demand & Supply) undeliberately.
Equilibrium and economies scale in market economy?
Equilibrium and economies scale in market economy
What does the long run perfect competition graph illustrate about the market structure and equilibrium in the industry?
The long run perfect competition graph shows that in a perfectly competitive market, firms earn zero economic profit in the long run. This indicates that the market is efficient and in equilibrium, with prices equal to costs and resources allocated optimally.
What is meant by efficiency continuum?
The efficiency continuum refers to capital markets. Within a capital market, if something is reasonable and efficient to the market, it is said to be on the efficiency continuum.
Example of market equilibrium?
Market equilibrium is when the demand of the product and the supply of the product is equal. If either demand or supply changes, then the equilibrium adjusts.
What are the differences between a market in equilibrium and a market in disequilibrium?
equilibrium is the responsiveness of quantity demand to a change in price.
What is the impact of a shortage on the equilibrium price and quantity in an economic market?
A shortage in an economic market leads to an increase in the equilibrium price and a decrease in the equilibrium quantity.
Where is the price ceiling located on a graph depicting market equilibrium?
The price ceiling is located below the equilibrium price on a graph depicting market equilibrium.
