## Answers

a.

Answer: No

The production at the minimum cost is the criterion.

Firm A cannot able to produce at the minimum cost, since it produces at $4 cost where the minimum cost is $2 achieved by the firm B.

b.

Answer: No

Since all the firms are not able to produce at the minimum cost, the industry is not productively efficient.

c.

Answer: No

The criterion of this efficiency is the equality of price and MC; (P = MC). Since MCs are not equal, few price taking firms (fixed price) may suffer with lower price, since they have higher costs compared to those lowers.

d.

Answers:

A: 500

B: 800

C: 200

Total production would be (500 × 3 =) 1,500 kilos.

The production at the minimum cost should be searched here; it is possible at $4 MC in each case; therefore, the corresponding units are 500, 800, and 200 (making the aggregate of 1,500).

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