When Determining How to Allocate Scarce Resources, an Entrepreneur Should

question 7

Multiple Choice

When determining how to allocate scarce resources, an entrepreneur should:

• A) Focus on the company's key success factors
• B) Spread resources around to gain experience
• C) Focus exclusively on marketing
• D) Focus exclusively on technology
• E) None of the above

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Definitions:

Marginal Cost

The charges incurred for the production of an additional unit of a good or service.

Deadweight Loss

A loss of economic efficiency that can occur when the equilibrium for a good or a service is not achieved due to market inefficiencies.

Consumer Surplus

The difference in planned versus actual spending by consumers on a good or service.

Price Discrimination

A pricing strategy where a firm charges different prices for the same product or service to different consumers, based on their ability to pay, in order to maximize profits.