- 12 Perfectly Competitive Markets Result In An Efficient Output Mix Because A Producers Set Mrt Equal To The Price Rati 1 (227.17 KiB) Viewed 29 times
12. Perfectly competitive markets result in an efficient output mix because a. Producers set MRT equal to the price ratio and consumers set MRS equal to the price ratio, so that the MRT equals the MRS of consumer. b. Consumers are on the contract curve c. The slope of the production possibility frontier is equal to the price ratio. d. The distribution of the final output is Pareto efficient 13. There is a shortage of bottled water in California, and the governor decides that the government distributes equal quantities of bottled water to each person and at no cost to the consumers. Consumers are not allowed trade or give their water to other people. Is this distribution of water Pareto efficient? a. Yes, because each person has the same amount of water. b. Yes, because everyone receives water for free c. Not if people have different marginal rates of substitution between water and other goods. d. It is impossible to determine without knowing the price of water and income of goods.