Allocative Efficiency Is Achieved When

question 186

Multiple Choice

Allocative efficiency is achieved when

• A)goods and services are fairly distributed among consumers in an economy.
• B)firms produce the goods and services that consumers value most.
• C)firms produce goods and services at the lowest cost.
• D)there are no shortages or surpluses in the market.

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Definitions:

Monthly Fixed Manufacturing Cost

Regular, unchanging costs incurred by a manufacturing facility each month regardless of the volume of production, such as rent, salaries, and insurance.

Office Expense

Costs related to the day-to-day operations of an office, including supplies, utilities, and administrative salaries.

Total Cost

The complete amount of expenses incurred by a business or individual in the production or acquisition of a good or service.

Manufacture Units

The individual items or goods produced by a manufacturing process.