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13 May 2018

35) An economy will be allocatively efficient if A) the economy's resources are fully employed. B) all firms are breaking even. C) the average cost of production is the lowest possible for all goods produced. D) price equals marginal cost for all products. E) the price equals average cost for all goods.

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14 May 2018
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Related questions

In the long run, a perfectly competitive industry is allocatively efficient because

(a) consumer surplus could be larger if the price were lower;

(b) production occurs at the lowest average total cost;

(c) marginal costs are low;

(d) it maximizes producer surplus;

(e) the opportunity cost of resources needed to produce the last unit of output just equals the marginal value to consumers of the last unit

Are perfectly competitive markets productively efficient in the long run?

A. Yes, because firms produce at the lowest average cost possible.

B. Yes, because firms produce where the marginal benefit to consumers equals the marginal cost of production.

C. No, because firms earn zero economic profits.

D. No, because firms will not shut down unless the price is less than the average variable cost of production.

E. Both a and b.

Are perfectly competitive markets productively efficient in the long run?

a. Yes, because firms produce at the lowest average cost possible.

b. Yes, because firms produce where the marginal benefit to consumers equals the marginal cost of production.

c. No, because firms earn zero economic profits.

d. No, because firms will not shut down unless price is less than the average variable cost of production.

e. Both a and b.

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