If a Firm Is Producing a Given Level of Output

question 24

Multiple Choice

If a firm is producing a given level of output in an economically efficient manner,then it must be the case that

• A)this is the lowest cost method of producing that output.
• B)each input is producing its maximum marginal product.
• C)this output level is the most that can be produced with the given level of inputs.
• D)both a and c
• E)none of the above

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Definitions:

Economics

The social science that studies the production, distribution, and consumption of goods and services.

Microeconomics

The branch of economics that focuses on the actions of individuals and industries, like the dynamics between buyers and sellers, and the factors that influence the choices of individuals and businesses.

Private Enterprise System

An economic system where private individuals or businesses own capital goods and operate with minimal government intervention.

Equilibrium Price

The market price at which the quantity of goods supplied equals the quantity of goods demanded, resulting in a stable market condition.