Economics Multiple Choice Question – 10 May 2023

What might prevent an economy in which all firms are required to equate price and marginal cost from achieving allocative efficiency?

Select ONE answer:

1. differences in preferences between consumers
2. divergences between private and social costs
3. inequalities of income and wealth
4. product differentiation

Show your workings to arrive at your answer, and explain and justify your reasons:

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This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 2

1. Not correct
2. Correct
3. Not correct
4. Not correct

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