If for a Firm P = Minimum ATC = MC

question 128

Multiple Choice

If for a firm P = minimum ATC = MC, then

• A) neither allocative efficiency nor productive efficiency is being achieved.
• B) productive efficiency is being achieved, but allocative efficiency is not.
• C) both allocative efficiency and productive efficiency are being achieved.
• D) allocative efficiency is being achieved, but productive efficiency is not.

---

Definitions:

International Trade

The exchange of goods and services across national borders.

Free Trade Policy

An economic policy that allows imports and exports among member countries with no tariffs, quotas, or prohibitive regulations.

North American Free Trade Agreement

A trade agreement among the United States, Canada, and Mexico to reduce trade barriers and increase economic activity among them.

Trade

The exchange of goods or services between parties.