Which Assumption Leads to an Efficient Allocation of Resources Among

question 74

Multiple Choice

Which assumption leads to an efficient allocation of resources among firms?

• A) Factor markets are open and competitive.
• B) All firms pay different prices for identical inputs.
• C) Firms behave so as to minimize their profits.
• D) All of the above are correct.

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Definitions:

Assembly Hours

The total hours spent on the assembly stage of the manufacturing process, often used in costing and performance measurement.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific activities, providing more accurate insights into the true costs of production.

Activity Rates

In activity-based costing, the cost allocation rate for each activity cost pool, allowing for more accurate product or service costing.

Customer Margin

The profit margin that is generated from a specific customer, calculated by subtracting the costs associated with serving that customer from the revenue earned from them.