For an Entire Economy, Allocative Efficiency Requires That

question 75

Multiple Choice

For an entire economy, allocative efficiency requires that

• A) MRP is equated for all factors of production.
• B) goods are allocated equitably across markets.
• C) MC = P for all goods.
• D) price is greater than marginal cost for all goods.
• E) price equals average cost for all goods.

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Definitions:

Units Sold

The total number of product units that have been sold during a particular time period.

Contribution Margin

The difference between sales revenue and variable costs, used to cover fixed expenses and provide profit.

Units Sold

The total quantity of products sold within a specific period.

Absorption Costing

An accounting method that includes all of the manufacturing costs in the cost of a product, including both fixed and variable costs.