Which of the following statements is true?
A) A competitive market can achieve allocative efficiency without achieving productive efficiency.
B) A competitive market can achieve productive efficiency without achieving allocative efficiency.
C) A competitive market economy cannot achieve both productive efficiency and allocative efficiency simultaneously.
D) A competitive market cannot achieve productive efficiency without also achieving allocative efficiency.

Question

Quizplus · Accepted Answer

A competitive market can achieve productive efficiency without achieving allocative efficiency because productive efficiency refers to producing goods at the lowest possible cost while allocative efficiency refers to producing the specific goods that consumers want at the lowest possible cost. It is possible to produce goods efficiently, but if the goods produced are not what consumers want, then allocative efficiency is not achieved.

Which of the Following Statements Is True