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Author Question: In long-run competitive equilibrium, the perfectly competitive firm produces where price equals ... (Read 147 times)

appyboo

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on: Jun 29, 2018
In long-run competitive equilibrium, the perfectly competitive firm produces where price equals minimum average total cost.
 
  a. What is this efficiency criterion called?
  b. How does it benefit consumers?

Question 2

The success of Walt Disney's animated film The Lion King in 1994 increased production of animated films, increasing the demand for animators much faster than the supply of animators was increasing.
 
  As a result, in the market for animators, the equilibrium wage fell and the equilibrium quantity increased.
 
 
  Indicate whether the statement is true or false
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TheDev123

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Reply #1 on: Jun 29, 2018
Answer to Question 1

a. Productive efficiency
b. Productive efficiency means that a product is produced at the lowest possible cost. In other words, the product is produced with a minimum amount of scarce resources. Consumers benefit because society can produce more products with its scarce resources.

Answer to Question 2

FALSE


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