Economic efficiency refers to the optimal allocation of resources where they are most valued and the production and distribution of goods and services occurs at the lowest possible cost. It ensures that no further improvements can be made in one person's well-being without making someone else worse off.
A market condition wherein no buyer or seller has the power to alter the market price of a good or service. Characteristics of a perfectly competitive market include a large number of buyers and sellers, a homogeneous good or service, equal awareness of prices and volume, absence of discrimination in buying and selling, total mobility of productive resources, and complete freedom of entry. Perfect competition exists only as a theoretical ideal, also called pure competition.
