Final answer:
A company with low efficiency and high effectiveness tends to produce desirable products that are too expensive due to higher production costs. Monopolistically competitive firms lack productive and allocative efficiency, causing them to have higher prices compared to perfectly competitive firms.
Step-by-step explanation:
A company with a low level of efficiency and a high level of effectiveness is most likely to produce a product that customers want, but that is too expensive for them to buy. This scenario describes a company that is able to create products that meet customer needs (effectiveness) but does so at a high cost due to low efficiency.
In a monopolistically competitive market, a firm is not productively efficient because it does not produce at the minimum of its average cost curve. Such a firm is also not allocatively efficient, since it doesn't produce where price (P) equals marginal cost (MC), leading to higher prices for consumers.
The situation where a company is not producing with minimal waste is an absence of productive efficiency. In the long run, a perfectly competitive market achieves productive efficiency as firms enter and exit the market, allowing goods to be sold at the lowest possible average cost.
Conversely, monopolistically competitive firms tend to produce lower quantities at higher costs and charge higher prices than perfectly competitive firms, which results in products that might be desirable but are priced higher than what some consumers are willing to pay.