Which of the Following Describes a Difference Between Allocative Efficiency

question 226

Multiple Choice

Which of the following describes a difference between allocative efficiency and productive efficiency in a perfectly competitive market?

• A)Allocative efficiency is achieved only in the long run. Productive efficiency is achieved only in the short run.
• B)Allocative efficiency is achieved only in the long run. Productive efficiency is achieved in the short run and the long run.
• C)Allocative efficiency is achieved only in the short run. Productive efficiency is achieved only in the long run.
• D)Allocative efficiency is achieved in the short run and the long run. Productive efficiency is achieved only in the long run.

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Definitions:

Indirect Guarantees

Guarantees provided by a third party to ensure the fulfillment of a contractual obligation indirectly, such as through a subsidiary or parent company.

Warranty Accrual Method

An accounting method used to estimate the future costs of warranties and allocate them to the period in which the related revenue is recognized.

Warranty Expense

Represents the cost that a company expects to incur under its warranty obligations to repair or replace products that it has sold.

Washing Machines

Home appliances used for washing laundry, such as clothing and sheets.