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For a perfectly competitive firm, profit maximization does not conflict with resource allocative efficiency. Do you...

  1. For a perfectly competitive firm, profit maximization does not conflict with resource allocative efficiency. Do you agree? Explain your answer.
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Answer #1

Answer : I agree with the statement as in perfect competition there is profit maximization and proper allocation of resources efficiently and effectively in order to maximize the profit of the firm. As you know in perfect competition profit maximization condition is MR =MC. It means the firm is produced that level of output at which profit is maximum. As you know P =MC in the perfect competitive firm so they able to gain maximum profit by selling at this level and resources has been allocated efficiently and properly.It shows that condition of P=MC has been attained at this level of output.

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