When Is Productive Efficiency Achieved

question 92

Multiple Choice

When is productive efficiency achieved?

• A)When firms add a low profit margin to the goods and services they produce
• B)When firms produce the goods and services that consumers value most
• C)When firms produce goods and services at the lowest cost
• D)When there are no shortages or surpluses in the market

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Definitions:

Operating Income

Revenue obtained from the main operations of a business, not including the costs of interest and taxes.

Variable Costs

Expenditures that fluctuate in direct relation to production or sales volumes, such as labor costs and materials used.

Fixed Costs

are expenses that do not change in total over a period of time, regardless of the level of production or sales volume, such as rent or salaries.

Break-even Point

The point where the amount produced or sold generates revenue that matches the overall costs, leading to neither profit nor loss.