A graph plots price versus quantity. $2$ curves M C and A T C and a horizontal line labeled M R are graphed.The horizontal axis is labeled quantity. Points Q $1,$ Q$,$ and Q $2$ are marked on the horizontal axis from left to right. The vertical axis is labeled price. Point P is marked on the vertical axis. A horizontal line labeled M R begins at point P and goes straight and to the right. The curve labeled A T C begins at a point near the top$-$left, falls with decreasing steepness, intersects M R at a point, and ends at a point above the horizontal line labeled M R$.$ The curve labeled M C begins at a point above the horizontal axis and to the left of point Q $1,$ goes up and to the right with increasing steepness, intersects A T C and M R at a point, further goes up and ends at the top$-$right. The ending point of M C is near the top$-$left of the ending point of A T C$.$ The point of intersection of M R$,$ A T C$,$ and M C is above point Q$.$

At output level Q$1,$ in this diagram,

Multiple Choice

resources are underallocated to this product and productive efficiency is not realized.

productive efficiency is achieved, but resources are underallocated to this product.

resources are overallocated to this product and productive efficiency is not realized.

productive efficiency is achieved, but resources are overallocated to this product.