1. Allocative efficiency takes place in any market wherever

A) MR = MC.
B) MC = P.
C) MC = ATC.
D) at the lowest point on the MC curve.
E) beyond the lowest point on the MC curve.

2. When a perfectly competitive firm is earning an economic profit, the firm is

A) allocatively efficient.
B) allocatively inefficient.
C) operating where P = ATC.
D) operating at the lowest point on MC.
E) a price searcher.

3. When a perfectly competitive firm is earning a loss, allocative efficiency takes place where

A) MC touches ATC at the lowest point.
B) MC crosses the demand curve.
C) MC is at its lowest point.
D) MC just begins to rise.
E) ATC begins to rise.