Outside of the Relevant Range,variable and Fixed Cost-Behaviour Patterns May

question 32

True/False

Outside of the relevant range,variable and fixed cost-behaviour patterns may change.

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Definitions:

Allocative Efficiency

Refers to a state in which resources are distributed in a way that maximizes the net benefit to society, ensuring that goods and services are produced at the right quantities to meet consumer preferences.

Long-run Equilibrium

A state in which all factors of production are optimally distributed meeting the demands of consumers; also, a point where economic forces such as supply and demand are balanced.

Marginal Cost

The change in total cost that arises when the quantity produced is incremented by one unit.

Economic Efficiency

A situation where resources are allocated in a way that maximizes the net benefit to society.