When Society Achieves Economic Efficiency, It Is

question 52

Multiple Choice

When society achieves economic efficiency, it is:

• A) maximizing producer surplus but not consumer surplus.
• B) maximizing consumer surplus but not producer surplus.
• C) producing a specified amount of output at the highest possible cost.
• D) producing a specified amount of output at the lowest possible cost.

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Definitions:

Fixed Cost

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance expenses.

Variable

An element, feature, or factor that is liable to vary or change; used in statistical analysis and experiments.

Output

The total amount of goods and services produced by an economy or a production process.

AFC

Average Fixed Cost (AFC) is the fixed costs of production (such as rent, salaries, machinery) divided by the quantity of output produced.