Explain production possibility curve & competitive firm’s , Macroeconomics

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(a)   Explain the meaning of efficiency in economics and use a sketch diagram to illustrate its attainment by reference to the Production Possibility Curve.  

(b)  Refer to the concepts of allocative efficiency, productive efficiency and dynamic efficiency to explain how a perfectly competitive market allocates resources to achieve the maximum satisfaction of material wants. Use a diagram to illustrate a perfectly competitive firm's long-run equilibrium.

(c)   Referring to the same three concepts of efficiency, explain why a monopoly market structure is often regarded as less efficient than a perfectly competitive market.  Use a diagram to illustrate your answer.

 


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