When Does Allocative Efficiency Occur

question 75

Multiple Choice

When does allocative efficiency occur?

• A)When the price of the product is equal to its short-run average cost.
• B)When the price of the product is equal to its long-run average cost.
• C)When the price of the product is equal to its marginal cost.
• D)When the price of the product is below its marginal cost.

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Definitions:

Voting Rights

The rights of shareholders to vote on corporate matters, such as electing the board of directors or approving corporate policies.

Dividends Per Share

The amount of dividends that are paid out per share of a company's stock.

Contributed Shares

Shares issued to investors or others as part of the equity financing of a company, represents part of the capital contributed by the shareholders.