1. What is true of allocative efficiency?
- The price paid by the consumer represents the true cost of producing the last unit
- The price paid by the consumer represents the lowest cost of producing the last unit
- The price paid by the consumer represents the price the supplier is willing to sell for
1 of 14
Other questions in this quiz
2. What is X inefficiency?
- X inefficiency occurs when there is little incentive for firms to want to be efficient.
- X inefficiency occurs when a firm uses more inputs than are necessary for a given level of output. Associated with lack of competition e.g. within a monopoly
- X inefficiency occurs when a market fails to deliver the amount of products and services most wanted by consumers
3. Where does productive efficiency occur?
4. Improving products helps a firm gain or at least retain ______ in the face of competition
- Market share
5. Allocative efficiency does not apply to which market structure?
- Monopolistic competition
- Perfect competition
Similar Economics resources: