Author Question: Do firms actively seek allocative efficiency? (Read 78 times)

mccallkeeler · **on:** Oct 12, 2022

Question 1

Which of the following is required for an individual firm to be productively efficient?
◦ The firm must be on its LRAC curve.
◦ MC = P for all goods.
◦ All resources must be fully used.
◦ The firm must be allocatively efficient.
◦ P = ATC for all goods.

Question 2

Do firms actively seek allocative efficiency?
◦ Yes, but only perfectly-competitive firms seek allocative efficiency.
◦ Yes, all firms in all market structures seek allocative efficiency.
◦ No, firms do not seek allocative efficiency.
◦ Yes, but only profit-maximizing, imperfectly-competitive firms seek allocative efficiency.
◦ Yes, profit-maximizing firms in all market structures seek allocative efficiency.

Deonnak85 · **Reply #1 on:** Oct 12, 2022

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