The condition for allocative efficiency is violated when afirms are price makers( price searchers) bshort-run profits exist in a competitive industry cprice equals average total cost dthe market demand curve is inelastic in a competitive industry

The competition model is the most efficient type of market and is characterized by both productive and allocative efficiency.

Which of the following is likely to result in allocative inefficiency? aAn oligopoly market structure bA firm producing at the level of output where price is equal to marginal cost cA perfectly competitive market in long-run equilibrium with no externalities dA perfectly price-discriminating monopoly

What Is Market Efficiency?

Multiple Choice QuestionProductive efficiency in monopolistically competitive markets does not occur in the long run because firms set the priceMultiple choice question.on the supply curve where MR=MC to maximize economic profit, making output more than optimal from society's perspective.on the supply curve where VC=MR to maximize economic profit, making output less than optimal from society's perspective.on the demand curve where MR=MC to maximize economic profit, making output less than optimal from society's perspective.on the demand curve where MR=ATC to maximize economic profit, making output more than optimal from society's perspective.

Consider a good with external costs. Which of the following best describes why the market does not produce an allocatively efficient amount?Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.aThe marginal benefit to consumers exceeds the marginal private cost of production and the marginal social cost of production.bThe marginal social cost exceeds the marginal social benefit.cThe marginal social benefit exceeds the marginal social cost.dThe marginal private cost of production and the marginal social cost exceed the marginal benefit to consumers.Unanswered2 attempts left