Assessing Perfect Competition Market Structure and Efficiency

The video explores the market structure of perfect competition, focusing on its efficiency in resource allocation. It discusses productive and allocative efficiency, highlighting that perfectly competitive markets achieve these efficiencies in the long run. However, it notes that perfect competition is a theoretical construct and not fully applicable in real-world markets. The video also examines the impact of externalities on allocative efficiency and the limitations of perfect competition in fostering innovation and long-term economic growth due to normal profit constraints.

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