In a Purely Competitive Industry, an Optimal Allocation of Scarce

question 115

Multiple Choice

In a purely competitive industry, an optimal allocation of scarce resources occurs when

• A)P = AC.
• B)P = MC.
• C)MR = AC.
• D)TR = TC.

---

Definitions:

Fixed Fee

A pricing structure where a single set price is charged for a service, regardless of the time or resources used to complete it.

Charge Per Copy

The amount billed for each photocopy or printed page, typically in the context of office equipment or copy services.

High-low Method

A technique used in cost accounting to estimate variable and fixed costs based on the highest and lowest levels of activity.

Machine Hours

A measure of the amount of time a machine is operated, used in accounting to allocate manufacturing overhead costs.