Economist like purely competitive markets because they result in A. allocative efficiency only B. economic efficiency...
Homework Answers
Answer:
The correct answer is productive and allocative efficiency (i.e. Option C) because productive efficiency of purely competitive market helps the consumer to buy a good at lowest possible average cost (i.e. it satisfies the P=AC condition) which indicates there is no waste in purely competitive market and allocative efficiency allows to set the price equal to marginal cost (i.e. it satisfies the P=MC condition) which indicates at the market price marginal social benefit equals marginal social cost.
Hence, the correct answer is Option C (i.e. productive and allocative efficiency).
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Economist like purely competitive markets because they result in
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3) In this class we have discussed two types of efficiency: allocative efficiency and productive efficiency. This question is intended to explore those concepts more deeply. Assume the market for milk is a perfectly competitive market. Briefly explain the meaning of allocative efficiency in this market. a. b. Briefly explain the meaning of productive efficiency in this market. Is there any other important gain or cost to society caused by the dairy market that is not C. included in our...
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Question: Why in the long run, the purely competitive firm in a constant cost industry achieves...
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3) In this class we have discussed two types of efficiency: allocative efficiency and productive efficiency. This question is intended to explore those concepts more deeply. Assume the market for milk is a perfectly competitive market. Briefly explain the meaning of allocative efficiency in this market. a. b. Briefly explain the meaning of productive efficiency in this market. Is there any other important gain or cost to society caused by the dairy market that is not C. included in our...
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