Resources Are Efficiently Allocated When Production Occurs Where

question 52

Multiple Choice

Resources are efficiently allocated when production occurs where

• A) marginal cost equals average variable cost.
• B) price is equal to average revenue.
• C) price is equal to marginal cost.
• D) price is equal to average variable cost.

---

Definitions:

Probability Distribution

A mathematical function that provides the probabilities of occurrence of different possible outcomes for an experiment.

NPV

The calculation of the current value of all future cash flows generated by a project, after accounting for the initial capital expenditure.

IRR

Internal Rate of Return; a metric used in capital budgeting to estimate the profitability of potential investments.

Probability Distributions

A statistical function that describes all the possible values and likelihoods that a random variable can take within a given range.