Asked by Spanky Dixon on May 08, 2024
Verified
A purely competitive firm is producing at the point where its marginal cost equals the price of its product. If the firm increases its output, then total revenue will
A) increase and profits will increase.
B) decrease and profits will increase.
C) increase and profits will decrease.
D) decrease and profits will decrease.
Marginal Cost
The swell in cumulative expenditure due to the manufacture of an additional unit of a product or service.
Total Revenue
Total Revenue refers to the total receipts from sales of goods or services that is calculated by multiplying the price per unit by the number of units sold.
Profits
The financial gain that is realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes.
- Assess the financial gain or deficit through evaluation of cost data and market prices.
- Evaluate financial data related to costs to identify production quantities that enhance profit maximization.
Verified Answer
Learning Objectives
- Assess the financial gain or deficit through evaluation of cost data and market prices.
- Evaluate financial data related to costs to identify production quantities that enhance profit maximization.
Related questions
A Purely Competitive Firm Is Currently in Short-Run Equilibrium and ...
Answer the Question on the Basis of the Following Cost ...
If a Competitive Firm Is Operating at Its Efficient Scale ...
Explain How a Firm in a Competitive Market Identifies the ...
At Its Current Level of Production a Profit-Maximizing Firm in ...