Question

multiple choice question
oligopolies are not a desirable market structure because they achieve

allocation efficiency but not productive efficiency
both productive efficiency and allocation efficiency
neither productive efficiency nor allocation efficiency
productive efficiency but not allocation efficiency

Explanation:

In an oligopoly, firms restrict output to maximize profit. This leads to a situation where the quantity produced is less than the socially - optimal quantity (lack of allocative efficiency) and production is not at the minimum of average total cost (lack of productive efficiency).

Answer:

C. neither productive efficiency nor allocative efficiency