Question

multiple select question select all that apply when plant and equipment are underutilized because firms are producing less than the minimum - atc output, this is known as having _______. productive inefficiency allocative efficiency productive efficiency excess capacity

Explanation:

Productive inefficiency occurs when firms are not producing at the minimum - average total cost (ATC), which includes under - utilizing plant and equipment by producing less than the minimum - ATC output. Excess capacity means that firms are producing at a level below their full - capacity (minimum ATC output), resulting in underutilized resources. Allocative efficiency is about producing the right mix of goods, not related to underutilization of plant and equipment. Productive efficiency is when production occurs at minimum ATC, which is not the case here.

Answer:

A. productive inefficiency
D. excess capacity