Question

What price and level of output results in zero allocative inefficiency? Natural monopolies rarely operate at that price. Why?

***confused:( please explain? thank you!! :D

Answer 1

"zero allocative inefficiency" you are going to have to define this term better for me, i might be able to help you then

Answer 2

okay:)

so allocative efficiency is where a market produces only the types of goods and services that are most desirable in the society and are also in high demand, so zero allocative efficiency is when there is none of this:)

Answer 3

@dan815 but i don't know what the price would be?

and so not sure why they wouldn't operate at that price... but my guess just in general is they wouldn't operate at that price because they wouldn't be high in demand so they wouldn't make profit?