Question

multiple choice question
production occurs up to that level of output at which price ______ marginal cost, resulting in allocative efficiency under pure competition.
o equals
o doubles
o is less than
o is more than

Explanation:

In pure - competition, allocative efficiency is achieved when price equals marginal cost. This is because at this output level, the value that consumers place on a good (price) is equal to the cost of producing the last unit of the good (marginal cost), maximizing social welfare.

Answer:

A. equals