The following graph depicts the various cost curves for a representative competitive firm producing quantity Q1:

-Refer to the above graph to answer this question.If the price of the product is P1,what does the graph suggest?
A)The market is achieving productive efficiency but not necessarily allocative efficiency.
B)The market is achieving allocative efficiency but not necessarily productive efficiency.
C)The market is achieving neither productive efficiency nor allocative efficiency.
D)The market is achieving both allocative efficiency and productive efficiency.

Question

The following graph depicts the various cost curves for a representative competitive firm producing quantity Q1:
 
-Refer to the above graph to answer this question.If the price of the product is P1,what does the graph suggest?
A)The market is achieving productive efficiency but not necessarily allocative efficiency. 
B)The market is achieving allocative efficiency but not necessarily productive efficiency. 
C)The market is achieving neither productive efficiency nor allocative efficiency. 
D)The market is achieving both allocative efficiency and productive efficiency.

Quizplus · Accepted Answer

The Answer of The following graph depicts the various cost curves for a representative competitive firm producing quantity Q1:
 
-Refer to the above graph to answer this question.If the price of the product is P1,what does the graph suggest?
A)The market is achieving productive efficiency but not necessarily allocative efficiency. 
B)The market is achieving allocative efficiency but not necessarily productive efficiency. 
C)The market is achieving neither productive efficiency nor allocative efficiency. 
D)The market is achieving both allocative efficiency and productive efficiency.

The Following Graph Depicts the Various Cost Curves for a Representative