Allocative Efficiency Is Achieved When Firms Produce Goods and Services

question 231

Multiple Choice

Allocative efficiency is achieved when firms produce goods and services

• A)at the lowest possible cost.
• B)that consumers value most.
• C)at the lowest opportunity cost.
• D)at a marginal cost of zero.

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Definitions:

Original Principal

The initial amount of money borrowed or invested before any interest or earnings are applied.

Interest

The cost of borrowing money or the payment received for the use of money, typically expressed as an annual percentage rate.

Original Principal

The initial amount of money borrowed or invested, not including any interest or earnings.

Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, thereby eroding purchasing power.