Asked by Mallika Khullar on Jul 05, 2024
Verified
Which of the following expressions is correct for a competitive firm?
A) Profit = (quantity of output) × (price − average total cost)
B) Marginal revenue = (change in total revenue) /(quantity of output)
C) Average total cost = total variable cost/quantity of output
D) Average revenue = (marginal revenue) × (quantity of output)
Average Total Cost
The sum of all production expenses (both constant and changeable) divided by the total amount of products made.
- Comprehend the correlation between alterations in the levels of production and profitability.
- Calculate financial earnings in changing market conditions.
Verified Answer
ZK
Zybrea KnightJul 05, 2024
Final Answer :
A
Explanation :
Profit for a competitive firm is correctly calculated as the quantity of output multiplied by the difference between the price and the average total cost. This reflects the firm's total revenue minus its total cost.
Learning Objectives
- Comprehend the correlation between alterations in the levels of production and profitability.
- Calculate financial earnings in changing market conditions.