CAIE A-Level Economics 7.3.2 Productive & Allocative Efficiency
Practise locating productive and allocative efficiency on cost–revenue diagrams and explaining the underlying conditions.
- Syllabus
- 2026–2028
- Course
- Economics 9708
- Level
- A2
Exam points
- locate allocative efficiency where price or average revenue equals marginal cost
- locate productive efficiency at the minimum point of the average-cost curve
- apply efficiency conditions to competition, monopoly or nationalised-firm diagrams
7.3.2—Efficiency conditions question 1
[Maximum number: 1]
When is allocative efficiency achieved?
A
when a perfectly competitive market is in equilibrium
B
when everybody who needs the product can obtain it
C
when firms produce at the lowest possible cost
D
when monopolistic firms make normal profits
A
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