Allocative Efficiency Occurs in a Monopoly When

question 74

Multiple Choice

Allocative efficiency occurs in a monopoly when:

• A)price is less than marginal cost.
• B)price is greater than marginal cost.
• C)price is equal to marginal cost.
• D)price is equal to average cost.
• E)marginal revenue is equal to marginal cost.

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Definitions:

Inventory Turnover

A financial ratio indicating how many times a company has sold and replaced inventory over a period.

Days' Sales

A financial ratio that measures how efficiently a company uses its inventory by calculating the average number of days the company takes to sell its inventory.

Financial Ratios

Quantitative measures derived from financial statements used to assess a company's performance, financial health, and value.

Current Ratio

An indicator measuring a corporation's potential to handle its short-term financial obligations with assets on hand.