Economics · Efficiency in Market Structures
Consider these statements about allocative and productive efficiency across market structures: I. Perfect competition is both allocatively and productively efficient in long-run equilibrium. II. Monopoly can be productively efficient if it produces at minimum LRAC. III. Monopolistic competition is productively inefficient (excess capacity) but may be allocatively efficient in the long run. IV. A perfectly price-discriminating monopolist is allocatively efficient but productively inefficient. Identify the CORRECT statement(s):
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1I and IV
- 2IV only
- 3II only
- 4I and II✓
Correct answer
I and II
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