The following statements are true in a perfect market except which one? A. Resources are allocated efficiently because of competition B. Price is equal to marginal costs C. Normal profit made in the long run D. Firms do not operate at maximum efficiency

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Productive and Allocative Efficiency Analysis

Productive efficiency, also referred to as production efficiency is a term in economics describing the level at which a company is operating at its maximum capacity. Beyond this point, the entity will be unable to manufacture any additional goods without cutting down another product’s production level. This occurrence is an outcome of production happening alongside a Production Possibility Frontier (PPF).