Microeconomics question....?

Question

One of the principles of economics is that markets are usually a good way to organize economic activity. That means that markets tend to allocate resources EFFICIENTLY under most circumstances. What is the concept of "efficiency" and why is it important to economists?

Answer 1

You need to talk about avg total costs of production (ATC)....so firms need to be producing the good at the lowest poss price, this means there is an efficient allocation of resources (refer to the mechanics of a competitive market - which is efficient). If they dont achieve efficiency then there is issues with opportunity costs, resources could be better allocated to something else.