If an Input Is Sold in a Perfectly Competitive Market,its

question 22

Multiple Choice

If an input is sold in a perfectly competitive market,its price is equal to its:

• A) average cost.
• B) opportunity cost.
• C) cost-benefit ratio.
• D) cash flow premium.

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Definitions:

Deadweight Loss

The reduction in economic efficiency that happens when a good or service doesn't reach or cannot reach equilibrium.

Price Elasticity

A measure of the responsiveness of the quantity demanded or supplied of a good to a change in its price.

Tax

A financial charge or levy imposed by a government on individuals or entities to fund public services and government spending.

Inefficiency Costs

The costs associated with not utilizing resources in the most productive manner, which can lead to increased operational expenses and reduced profitability.