The Term Allocative Efficiency Refers to

question 45

Multiple Choice

The term allocative efficiency refers to

• A) the level of output that coincides with the intersection of the MC and AVC curves.
• B) minimization of the AFC in the production of any good.
• C) the production of the product mix most desired by consumers.
• D) the production of a good at the lowest average total cost.

---

Definitions:

Perpetual Inventory

A method used in inventory accounting that immediately notes the sale or acquisition of inventory through computerized point-of-sale systems and enterprise asset management software.

Inventory Accounting Systems

Methods used by companies to keep track of their inventory levels, costs, and value, including systems like FIFO, LIFO, and weighted average.

Inventory Valuation

The method or process of calculating the cost/value of inventory that a business holds at any given time, which affects cost of goods sold and profitability.

Merchandising Company

A business entity that purchases finished goods and resells them to consumers to earn a profit without altering the physical form of the goods.