Question

Will a perfectly competitive market display productive efficiency? Why or why not?

Short answer

In a perfect competitive market, there is a high level of productivity.

Step-by-step solution

Productive efficiency :

It occurs when the most efficient combination of inputs is used to provide the best possible combination of outputs at the lowest possible cost.

Explanation :

The term "productive efficiency" refers to production that is waste-free. In the long term, in a completely competitive market, there is an entrance and exit process for which the equilibrium market price is equal to the long-run average cost curve's minimum. To put it another way, items are manufactured and sold at the lowest feasible cost. P=MC=LRAC in a completely competitive market. The same may be said of the input market. As a result, in a completely competitive market, market forces determine productive efficiency.