micro

Briefly discuss the difference between the concepts of productive efficiency and allocative efficiency

productive efficiency pertains to production within an industry while allocative efficiency pertains to production across all industries

In the long run, perfect competition

results in allocative efficiency because firms produce where price equals marginal cost

Does the market system result in productive efficiency. in the long run perfect competition

results in productive efficiency because firms enter and exit until they break even where price equals minimum average cost

Firms in perfect competition produce the productively efficient output level in the short run and in the long run

False

long run equilibrium in perfect competition results in

allocative and productive efficiency

which of the following describes a situation in which every good or service is produced up to the point where the last unit provides a marginal benefit to consumers equal to the marginal cost of producing it

allocative efficiency

which of the following terms best describes a state of the economy in which production reflects consumer preferences

allocative efficiency

Perfect competition leads to allocative efficiency

because prices reflect consumer preferences and firms are motivated by profit

Allocative efficiency is when every good or service

is produced up to the point where the marginal benefit for consumers equals the marginal cost of producing it

if a natural monopoly regulatory commission sets a price where marginal cost is equal to demand

the firm would break even

a perfectly competitive firm in long run equilibrium produces output at the lowest level possible average total cost

true

Productive efficiency is

when a good or service is produced at lowest possible cost

assume the market for oranges is perfectly competitive. If the demand for oranges increases, will the market supply adding oranges. if the demand for oranges increases, then the market

will supply additional oranges because producers seek the highest return on their investments

Are perfect competitive markets efficient in a long run

yes, because firms produce where the marginal benefit to consumers equals the marginal cost of production

are perfectly competitive markets productively efficient in the long run

yes, because the firms produce a at the lowest average cost possible