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H - Econ - 2 > 3.5.11 - Market Structure, Static Efficiency, Dynamic Efficiency and Resource Allocation > Flashcards

3.5.11 - Market Structure, Static Efficiency, Dynamic Efficiency and Resource Allocation Flashcards

1
Q

What is static efficiency?

A

Efficiency at a particular point in time.

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2
Q

What types of efficiency can be considered static?

A

Allocative and productive.

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3
Q

What types of firms benefit from dynamic efficiency?

A

Monopolies and imperfectly competitive firms.

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4
Q

How can monopolies improve their dynamic efficiency?

A

Due to making abnormal profit in both short-run and long-run, this profit can be reinvested to achieve improvements in dynamic efficiency via R&D and innovation.

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5
Q

What is dynamic efficiency?

A

The improvements in productive efficiency over time.

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6
Q

What types of efficiency does monopolistic competition exhibit in the long-run?

A

Allocative efficiency.

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7
Q

What types of efficiency do perfectly competitive firms exhibit in long-run equilibrium?

A

Allocative efficiency
Productive efficiency

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8
Q

What types of efficiency do monopolies and oligopolies typically exhibit?

A

Dynamic efficiency

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H - Econ - 2 (57 decks)

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