Economics 9708 · AS & A Level · 7.6

7.6 — practice question

The diagram illustrates the cost and revenue curves of a natural monopoly. Which statement is correct?

  • AP2 and Q2 will achieve both allocative efficiency and productive efficiency.
  • BP2 and Q1 will achieve productive efficiency but not allocative efficiency.
  • CP3 and Q3 will achieve allocative efficiency but not productive efficiency.
  • DP3 and Q3 will achieve both allocative efficiency and productive efficiency.

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