How does pure competition impact the market?

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1041148

2026-03-11 10:55

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They are price takers, prices are kept at the minimal and at ideal in the eyes of society. There is economic efficiency where it is impossible to make someone better off without making someone else worse off, allocation of resource are at it's optimal level. However there is no dynamic efficiency due to 1) Perfect knowledge and 2) Normal profits in the long run (Firms would not have sufficient profits for research and development)

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