Price Increases Always Reduce Economic Efficiency

question 1

True/False

Price increases always reduce economic efficiency.

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Definitions:

Net Income

The total profit of a company after all expenses and taxes have been subtracted from total revenue.

Fixed Costs

Expenses that do not change in proportion to the level of goods or services produced within a certain period.

Hurdle Rate

The minimum rate of return on a project or investment required by a manager or investor.

Cost of Capital

The rate of return that a company must earn on its project investments to maintain its market value and attract funds.