allocative efficiency

______________ market structure leads to productive efficiency and a _______________ market structure leads to allocative efficiency.

Suppose there are two companies burning coal to generate electricity. The electricity generated is sold to the consumers, however coal burned generates a lot of smog pollution.

The marginal costs of abatement for both firms are:

$MC_1=10Q_1$ and $MC_2=3Q_2+15$

Suppose there are two companies burning coal to generate electricity. The electricity generated is sold to the consumers, however coal burned generates a lot of smog pollution.

The marginal costs of abatement for both firms are:

$MC_1=10Q_1$ and $MC_2=3Q_2+15$