Figure 7.2.1 -Refer to Figure 7.2.1 Above. When 2 Units of Output

question 30

Multiple Choice

Figure 7.2.1
-Refer to Figure 7.2.1 above. When 2 units of output are produced:

• A) marginal cost is falling.
• B) average total cost is falling.
• C) average variable cost is less than average fixed cost.
• D) marginal cost is less than average total cost.
• E) all of the above

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Definitions:

Price-Earnings Ratio

A valuation metric that measures a company's current share price relative to its per-share earnings, indicating investor expectations.

Net Income

The amount of profit a company generates after deducting all its costs, expenses, taxes, and interest from its total revenue.

Dividends

Payments made by a corporation to its shareholders, usually as a distribution of profits.

Payout Ratio

A financial metric indicating the percentage of earnings paid to shareholders in the form of dividends, reflecting a company's dividend sustainability.