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When firms compete by choosing output, the resulting market outcome will be efficient (maximize total surplus)....

When firms compete by choosing output, the resulting market outcome will be efficient (maximize total surplus).

True or False?

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Answer #1

If the firms in the market are competing by choosing output the they will be considered as price takers i.e. the price will be set by the demand and supply forces in the market, this will be perfectly competitive market and it will maximise the total surplus. The statement Is true.

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