In a Competitive Market, a Firm Achieves _____ Efficiency When

question 13

Multiple Choice

In a competitive market, a firm achieves _____ efficiency when it obtains output for the lowest possible cost.

• A) allocative
• B) price
• C) productive
• D) profit

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Definitions:

Payback Period

The length of time required to recover the cost of an investment.

Cash Inflows

Cash inflows refer to the money received by a business from various sources, including sales revenues, investment income, and financing.

IRR

The Internal Rate of Return, a financial metric used to estimate the profitability of investments by calculating the interest rate at which the net present value of all cash flows (both positive and negative) from a project equal zero.

Investment

Allocating resources, usually money, with the expectation of generating an income or profit.