Chapter Outline

12.1 Productive and Allocative Efficiency

12.2 Economic Regulation to Promote Efficiency

12.3 Canadian Competition Policy

AFTER STUDYING THIS CHAPTER YOU WILL BE ABLE TO

In the previous three chapters we examined various market structures,
from perfect competition at one end of the spectrum to monopoly at the
other end. In the middle were two forms of imperfect competition:

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 Learning Objectives (LO)

1. distinguish between productive efficiency and allocative

efficiency.

2. explain why perfect competition is allocatively efficient, whereas

monopoly is allocatively inefficient.

3. describe alternative methods for regulating a natural monopoly.

4. discuss some details about Canadian competition policy.