What Must Be True for Allocative Efficiency to Hold

question 99

Multiple Choice

What must be true for allocative efficiency to hold?

• A)Price must equal marginal revenue of the last unit sold.
• B)Price must equal the marginal cost of the last unit produced.
• C)Average variable cost is minimised in production.
• D)Average total cost is minimised in production.

---

Definitions:

NYSE Euronext

A global financial markets operator and provider of securities listing, trading, and information products and services.

Preliminary Prospectus

An initial document provided by a securities issuer that includes most of the details about the business and the proposed offering, but not the price.

Red Herring

A preliminary prospectus filed by a company with the Securities and Exchange Commission (SEC), usually in connection with the company's initial public offering.

Indenture

The contract between the bond issuer and the bondholder.