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How Competitive Equilibrium Ensure Proper Resource Allocation

Competitive equilibrium is an important topic in the field of economics, but it is highly complex at the same time. If you are thinking that you will get the exact answers in your textbooks or on internet on this topic, then you are surely mistaken, because the teachers are not going to give direct questions just like that. They will definitely wish that you do a little brainstorming before answering the questions.

But the problem is that you may not have that much time as well as enough clarity on the concept so that you could find competitive equilibrium homework solutions on your own. This is the reason why help will be essential.

Competitive equilibrium and how it ensures proper resource allocation

Competitive equilibrium is an economic scenario in which neither the sellers nor the buyers can improvise the bargaining condition given the existing conditions of supply, wage rates, and prices. At the equilibrium level of price, the demand is going to be equal to the supply.

If there will be any price and quantity combination apart from the equilibrium level of price and quantity, then it will diminish the overall level of efficiency, and it is also symbolic of the fact that resources are not properly allocated in an economy. It is only through the equilibrium position that it can be ensured that the resources are utilized to their optimum level, and the forces of demand and supply are counter balanced.

At the level of competitive equilibrium, the exact value that is related to a particular good is equal to the value of those resources which were given up for its production. You can also say that here marginal benefit will be equal to marginal cost. Thus, it is a proof that competitive equilibrium always ensures proper resource allocation.

You can have a tough time in finding exact competitive equilibrium homework solutions because the topic is highly detailed and complex.

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  • You may fail to understand the exact differences between general equilibrium and competitive equilibrium and the online medium will be the best way to resolve these confusions.
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I'm from Michigan, USA and working as Tutor at My Homework Help Since 2012. The teaching job is very challenging job, but I love to do. I'm helping students with their homework. If you need homework assistance, feel free to contact me!

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