Prices Are Inefficient Rationing Devices

question 77

True/False

Prices are inefficient rationing devices.

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Definitions:

Fixed Cost

Costs that do not change with the level of output produced, such as rent or salaries.

Lawn-mowing

The process of cutting or trimming the grass in a yard or field to maintain a neat and uniform appearance.

Variable Costs

Expenses that change in proportion to the amount of goods or services produced, like labor and materials.

Profit-maximizing Output

The point of production where a company reaches its maximum profit, occurring when marginal cost matches marginal revenue.