A Perfectly Competitive Industry Achieves Allocative Efficiency in the Long

Multiple Choice

A perfectly competitive industry achieves allocative efficiency in the long run. What does allocative efficiency mean?

A) Each firm produces up to the point where the price of the good equals the marginal cost of producing the last unit.
B) Each firm produces up to the point where all scale economies are exhausted.
C) Production occurs at the lowest average total cost.
D) Firms use an input combination that minimises cost and maximises output.