Question

Explain why economists believe that in standard markets the equilibrium is efficient, and welfare is maximised. Use and describe the fundamental assumptions and laws of economics.

Answer 1

Before knowing why economist believe that in standard markets the equilibrium is efficient,and welfare is maximised,

I like to explain what is standard market ?

standard market - Means where all things are having a level of quality or attainment,the standard of work is very good like price,quality of goods ,quantity for supply and demand is up to mark.

Now the main point-

Equilibrium price and quantity for supply and demand. ... And when you have all those features in your ideal market, then the outcome of that is that everyone's " utility" is maximized and everyone earns exactly the value of what they produce,so ultimaitly welfare will maximised.