Question

Which of the following conditions guarantee that a firm will achieve productive efficiency in the long run? Check all that apply. Production occurs at the minimum point on a firm's long-run average cost curve. The market for its product is perfectly competitive. The total cost of production is equal to the total benefit to consumers on all units sold. 0 There are multiple firms in the market.

Answer 1

Different variants of the above problem are available with students. The student is requested to make sure that the problem they are seeking a solution for is the same as the problem above. Production efficiency is a situation in which economy is not able to produce more of one good without scarifying the production of other good. Under production efficiency, production occurs at the minimum point on the long run average cost. The perfect competition markets are productive efficient in the long run because in the long run, it produces that quantity at the lowest point on average cost. Thus, correct options are 'production occurs at the minimum point on the firm's long run average cost curve' and 'the market for its product is perfectly competitive'. Thus, option a and b are correct.