Using Data Envelopment Analysis (DEA) for an Inefficient Unit, a More

question 9

Multiple Choice

Using Data Envelopment Analysis (DEA) for an inefficient unit, a more efficient composite unit can be found by

• A) Solving its DEA problem and retrieving the weights from the answer report.
• B) Solving its DEA problem and examining those units whose final value is non-zero.
• C) Solving its DEA problem and using the resulting shadow prices as composite weights.
• D) Solving its DEA problem and using the positive resulting shadow prices as composite weights.

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Definitions:

Allocative Efficiency

A state of the market where resources are allocated in a way that maximizes the overall benefit to society, where the price of a good equals the marginal cost of production.

Monopoly Behavior

The actions of a firm that is the sole provider of a good or service, often involving price setting and market control.

Monopoly Structure

A market structure characterized by a single seller that controls the whole industry, leading to a lack of competition and high prices for consumers.

Relevant Market

The market in which a particular product or service is sold, considering the competition and the demand of consumers.