A firm operating in a market economy has a strong incentive to be productively efficient and allocatively efficient because the former enables it to minimize production costswhile the latter ensures it of ample revenues. If a firm is productively and allocativelyefficient, it earns a profit; if it is not, it suffers a loss. Would you expect the new and better machinery and equipment to be adopted more rapidly in amarket economy or in a centrally planned economy?

Question

Iris Fitzpatrick

Business

28 December, 22:16

A firm operating in a market economy has a strong incentive to be productively efficient and allocatively efficient because the former enables it to minimize production costswhile the latter ensures it of ample revenues. If a firm is productively and allocativelyefficient, it earns a profit; if it is not, it suffers a loss. Would you expect the new and better machinery and equipment to be adopted more rapidly in amarket economy or in a centrally planned economy?

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Answers (1)

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Kylan Frye · Answer 1

Market Economy

Explanation:

A firm operating in a market economy has a strong incentive to be productively efficient and allocatively efficient. this makes firms more likely to adopt new technology. whereas centrally planned economy are less competitive and less efficient. the competition in the market economy makes is more probable for it to adopt new technology