Question

Assume that candle wax is traded in a perfectly competitive market in which the demand curve captures buyers’ full willingness to pay while the supply curve reflects all production costs. For each of the following situations, indicate whether the total output should be increased, decreased, or kept the same in order to achieve allocative and productive efficiency.

Answer 1

kept the same in order to achieve allocative and productive efficiency.

Step-by-step explanation:

Full production means that employed resources are providing maximum satisfaction for our material wants. Full production implies two kinds of efficiency: 1. Allocative efficiency means that resources are used for producing the combination of goods and services most wanted by society