In the Absence of Market Failures, Allocative Efficiency Is Achieved

question 61

Multiple Choice

In the absence of market failures, allocative efficiency is achieved only under perfect competition because only this market structure results in

• A) productive efficiency.
• B) P = MC.
• C) complete freedom of entry and exit.
• D) zero long- run profits.
• E) maximization of profits through competition.

---

Definitions:

Lay Language

Simplified language that is easily understood by individuals without specialized knowledge.

Randomized Controlled Trial (RCT)

A study design that randomly assigns participants into an experimental group or a control group to measure the effectiveness of interventions.

Gold Standard

Refers to the best, most reliable, or most prestigious thing of its type.

Peer-reviewed Article

A scholarly work that has been evaluated and deemed credible by experts in the same field before publication.