Question

"How does the price and output behavior of a price-searcher compare with that of a price-taker? Be sure to explain your answer fully and illustrate with the appropriate diagrams. What are the implications of this for both allocative efficiency and technical efficiency? Again, use diagrams to illustrate where appropriate."


I am very comfortable with understanding the concepts of "price seeker", "price taker", "technical efficiency", and "allocative efficiency", however I don't know how price seeking/taking behaviors affects technical allocative efficiencies?

I'm not sure how the two relate? Can anyone assist? Thanks!