The Extra Revenue Collected by Selling an Extra Unit of Output

question 59

Multiple Choice

The extra revenue collected by selling an extra unit of output is

• A) equal to price for both perfect competitors and monopolists.
• B) a concept useful only when studying monopoly.
• C) less than price for both perfect competitors and monopolists.
• D) calculated as total revenue divided by output.
• E) equal to price for a perfect competitor but less than price for a monopolist.

---

Definitions:

Overhead Accounts

Accounts that track the indirect costs of production or services, such as utilities and rent.

Resource Consumption

The process of using up resources, such as raw materials, labor, and energy, in the production of goods and services.

Manufacturing Overhead

Manufacturing overhead encompasses all production costs except direct labor and direct materials used in manufacturing.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific activities, providing more accurate costs of producing specific products or services.