Which of the Following Describes a Situation in Which a Good

question 100

Multiple Choice

Which of the following describes a situation in which a good or service is produced at the lowest possible cost?

• A)productive efficiency
• B)allocative efficiency
• C)marginal efficiency
• D)profit maximisation

---

Definitions:

Alter Behavior

The process of changing or modifying actions, habits, or conduct.

Production Subsidies

Financial support given by the government to producers or manufacturers to help reduce the cost of producing goods or services.

External Costs

These are costs of a transaction that affect someone who did not choose to incur that cost, often not reflected in the market prices.

Adverse Selection

A situation in which one party in a transaction has more or better information than the other, often leading to an imbalance and inefficient market outcomes.