Only one of the following statements is correct.The statements compare perfectly competitive (PC)markets and monopolistically competitive (MC)markets.Which statement is correct?
A)Productive efficiency is achieved in both PC and MC markets. Allocative efficiency is achieved only in MC markets.
B)Allocative efficiency is achieved in both PC and MC markets. Productive efficiency is achieved only in PC markets.
C)Productive efficiency and allocative efficiency are both achieved in PC markets. Neither is achieved in MC markets.
D)Allocative efficiency is achieved only in PC markets. Productive efficiency is achieved only in MC markets.

Question

Quizplus · Accepted Answer

In perfectly competitive markets, both productive and allocative efficiency are achieved. In monopolistically competitive markets, neither is achieved due to differentiated products and excess capacity.

Only One of the Following Statements Is Correct