Asked by Morgan Burroughs on Jul 01, 2024
If for a firm P = minimum ATC = MC,then:
A) neither allocative efficiency nor productive efficiency is being achieved.
B) productive efficiency is being achieved,but allocative efficiency is not.
C) both allocative efficiency and productive efficiency are being achieved.
D) allocative efficiency is being achieved,but productive efficiency is not.
Allocative Efficiency
Allocative efficiency occurs when resources are distributed in a way that maximizes the net benefit to society, matching consumer preferences with production.
Productive Efficiency
A state where an economy or entity is operating in such a way that it cannot produce more of one good without reducing the output of another good.
Minimum ATC
The lowest point on the average total cost curve, representing the most efficient scale of production.
- Acquire an understanding of allocative and productive efficiency concepts in the context of production economics.
- Understand the conditions for long-run equilibrium in purely competitive markets and their implications for efficiency.
Learning Objectives
- Acquire an understanding of allocative and productive efficiency concepts in the context of production economics.
- Understand the conditions for long-run equilibrium in purely competitive markets and their implications for efficiency.