Multiple choice

Efficient allocation of resources is achieved to greatest extent under

  1. Monopoly

  2. Perfect competition

  3. Monopolistic

  4. Oligopoly

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Perfect competition achieves the most efficient allocation of resources because it ensures allocative efficiency (P=MC) and productive efficiency. In perfect competition, firms are price takers, there is free entry and exit, perfect information, and homogeneous products - all conditions that maximize social welfare and minimize deadweight loss.