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A pizza parlor can make 100 pizzas in an evening. They make 35 pepperoni pizzas and 35 extra cheese pizzas. 100 people order pizza, but 50 people would like a pepperoni pizza and 50 would like an extra cheese pizza. This pizza parlor is what?

Answer :

Answer:

Technically efficient, but not allocatively efficient nor economically efficient

Explanation: They're not really making requirements.

The pizza parlor can be said to be technically efficient.

  • The company is technically efficient as the available resources were used for producing the pizzas.

  • Allocative efficiency is when the goods that's produced by the company is distributed properly among the consumers without any wastage. In this case, the company isn't allocative efficient since they made 35 pepperoni pizzas but 50 people wanted pepperoni pizza.

  • For instance, if 20 pizzas are made for exactly 20 customers, then there is allocative efficiency.

In conclusion, the company is not economically and allocatively efficient but it's technically efficient.

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