After long-run adjustments, a purely competitive market achieves
A)productive efficiency but not necessarily allocative efficiency.
B)allocative efficiency but not necessarily productive efficiency.
C)either productive efficiency or allocative efficiency, but not both.
D)both productive and allocative efficiency.

Question

Quizplus · Accepted Answer

In a purely competitive market, after long-run adjustments, both productive and allocative efficiencies are achieved. Productive efficiency occurs when goods are produced at the lowest possible cost, and allocative efficiency happens when the mix of goods being produced represents the mix that society most desires, based on the price mechanism.

After Long-Run Adjustments, a Purely Competitive Market Achieves