Question

multiple choice question
in pure competition, ______ efficiency is achieved because free entry and exit forces firms to operate where average total cost is at a minimum.
o market
o allocative
o productive
o price

Explanation:

Productive efficiency occurs when firms produce at the minimum - average - total - cost. In pure competition, free entry and exit drive firms to operate at this cost - minimizing level. Allocative efficiency is about producing the right mix of goods where price equals marginal cost. Market and price are not the specific types of efficiency described here.

Answer:

C. productive