The Diagram Below Shows the Demand and Supply Curves in a Perfectly

question 93

Multiple Choice

The diagram below shows the demand and supply curves in a perfectly competitive market. FIGURE 12-5
-Refer to Figure 12-5. Allocative efficiency occurs

• A) where the areas 1, 2, 3, and 4 are maximized.
• B) at the higher output Q₃.
• C) at price P1 and output Q₃.
• D) at price P2 and output Q₂.
• E) at the lower output Q₁.

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