An oligopolist charges a lower price than the short-run profit-maximizing price. How does this affect the firm’s allocative efficiency?







a. The firm achieves allocative efficiency because P 1 exceeds MC.

b. The firm fails at allocative efficiency because P 1 is less than the minimum ATC.

c. The firm fails at allocative efficiency because P 1 exceeds MC.

d. The firm achieves allocative efficiency because P 1 is less than MC.


c. The firm fails at allocative efficiency because P 1 exceeds MC.

Economics

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