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Pearson Edexcel IAL Economics 3.3.3.4d Productive & allocative efficienc

Practise judging productive and allocative efficiency in monopolistic competition using profit, cost curves and long-run market outcomes.

Syllabus
First assessment 2019
Course
Economics YEC11
Level
A2

Exam points

  • interpret a diagram to decide whether price exceeds marginal cost at the chosen output
  • link long-run monopolistic competition to normal profit and productive inefficiency
  • compare efficiency and profit combinations in tables for monopolistically competitive firms

3.3.3.4d - Productive and allocative efficiency in the short run and long run question 1

[Maximum number: 1]

A farm producing wheat is operating in a monopolistically competitive market. Which one of the following will apply to this firm?

A

Allocative inefficiency in the long-run

B

Productive efficiency in the short-run

C

Supernormal profit in the long-run

D

Allocative efficiency in the short-run

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