Only one of the following statements is correct. The statements compare perfectly competitive (PC) markets and monopolistically competitive (MC) markets. Which statement is correct?
A) Productive efficiency is achieved in both PC and MC markets. Allocative efficiency is achieved only in MC markets.
B) Allocative efficiency is achieved only in PC markets. Productive efficiency is achieved only in MC markets.
C) Productive efficiency and allocative efficiency are both achieved in PC markets. Neither is achieved in MC markets.
D) Allocative efficiency is achieved in both PC and MC markets. Productive efficiency is achieved only in PC markets.
C
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Your textbook authors use the urban traffic example to show
A) why economics cannot explain non-financial processes. B) how social cooperation emerges when people act under generally accepted rules. C) how a smooth flow of traffic can only be achieved by detailed, central planning. D) how a smooth flow of traffic can only be achieved if people drive in the public interest.
For any given firm in a monopolistically competitive market, the long-run economic profit tends to be __________ and firms operate to the ____________ of the minimum point on the average total cost curve.
a. positive; left b. negative; right c. negative; right d. zero; left