What Rule Must Be Followed to Obtain an Efficient Allocation

question 26

Multiple Choice

What rule must be followed to obtain an efficient allocation of resources?

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

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Definitions:

Capital Structure

The mix of different forms of external funds and equity that a company uses to finance its operations and growth.

Debt and Equity

Two of the main ways companies can raise capital; debt involves borrowing money, whereas equity involves selling a stake in the company.

Equity Account

An account that represents the owner's equity or interest in a company, usually comprising investments made by the shareholders and retained earnings.

Compensation Package

The total remuneration, including salary, bonuses, benefits, and any other financial rewards, provided to an employee.