Question: Why does producing where P = MC indicate allocative efficiency? Why does producing at the minimum of ATC indicate productive efficiency? Using the notion of

  1. Why does producing where P = MC indicate allocative efficiency?

  1. Why does producing at the minimum of ATC indicate productive efficiency?

  1. Using the notion of total surplus, explain why perfectly competitive firms are efficient by monopolies are not.Be sure to draw graphs to explain your answer.

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