1. Compared between monopoly and perfect competitive market, there is no deadweight loss in the latter one, so the market is claimed to be the most (static) efficient. What is deadweight loss? Why the standard theory says it is bad to society? Now, DWL emerges in monopoly as we must assume both markets have identical MC and Demand curves. Why we need to assume that and why this assumption might be invalid?
2. Conventional textbook championed perfect competitive market as it produces highest static efficiency. However, some economists argue that markets especially in the long run rather require dynamic efficiency. What is the static efficiency in perfect competitive market? How it differs from dynamic efficiency? Why perfect competition is less likely to innovate?