An Efficient Solution to a Pricing Problem

question 238

Multiple Choice

An efficient solution to a pricing problem

• A)makes both buyers and sellers better off than any other possible solution.
• B)may not be the socially "fair" solution.
• C)occurs when producers' total cost of production equals consumers' total utility from the output produced.
• D)maximizes the output of the good being priced.

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Definitions:

Debt-equity Ratio

A measure of a company's financial leverage calculated by dividing its total liabilities by its shareholder's equity.

Growth Rate

Growth rate refers to the percentage increase in the size or value of something over a specific period.

Retains Earnings

Profits that a company chooses to re-invest in the business rather than distribute to shareholders.

Capital Intensity Ratio

The capital intensity ratio measures the amount of capital needed per dollar of revenue; a higher ratio indicates that more assets are needed to generate income.