If a Perfectly Competitive Firm Achieves Productive Efficiency Then

question 232

Multiple Choice

If a perfectly competitive firm achieves productive efficiency then

• A)it will raise its price in order to earn an economic profit.
• B)the price of the good it sells is equal to the benefit consumers receive from consuming the last unit of the good sold.
• C)it is producing at minimum efficient scale.
• D)it is producing the good it sells at the lowest possible cost.

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Definitions:

Arbitragers

Individuals or entities that attempt to profit from price differences of the same or similar financial instruments, on different markets or in different forms.

Market Inefficiency

A condition where all available information is not fully incorporated into asset prices, leading to opportunities for higher returns.

Siamese Twin Companies

Companies listed in different countries that share an operational business but trade separately on the stock exchange.

Equity Carve-Outs

A type of corporate restructuring where a company creates a new, independent company by selling or distributing new shares of its existing division or subsidiary.