What is meant by productive efficiency? How does a perfectly competitive firm achieve productive efficiency?
What will be an ideal response?
Productive efficiency refers to the situation in which a good or service is produced at the lowest possible cost, in particular, every good or service is produced up to the point where the last unit is produced where the market price is equal to minimum average total cost.
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An increase in the number of buyers in the market causes
a. a decrease in equilibrium quantity b. a decrease in equilibrium price c. an increase in demand d. a decrease in production e. an increase in supply
The demand for lobster is lower in the spring than in the summer. If the price of lobster is higher in spring than in summer then
a) consumers' tastes for lobster are greater in spring than in summer b) the supply of lobster is greater in summer than in spring. c) there are more substitutes for lobster in summer than there are in spring d) there is a shortage of lobster in spring and a surplus of lobster in summer