Multiple Choice
Resource allocative efficiency exists for a perfectly competitive firm because
A) price equals marginal revenue and the firm equates marginal revenue and marginal cost to maximize profits.
B) price equals average total cost and the firm equates marginal revenue and average total cost to maximize profits.
C) price is greater than marginal revenue and the firm equates marginal revenue with average total cost to maximize profits.
D) price is less than marginal revenue and the firm equates marginal cost and marginal revenue to maximize profits.
E) none of the above
Correct Answer:
Verified
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