What is the level associated with the efficient allocation

Reference no: EM13236736

magine an economy where a state-owned enterprise exists alongside a private firm that produces the same good. The private firm has a TEP level that is three times as high as the SOE: Ap = 3x As x the production functions are Yp=Ap x Np and Ys=As x Ns, where Np+Ns=1. The SOE employs three quarters of the work (Ns=3/4).

what is the TEP level for the economy relative to the level associated with the efficient allocation?

Reference no: EM13236736

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