If Total Revenue Is Greater Than Variable Costs but Less

question 122

True/False

If total revenue is greater than variable costs but less than total costs, a firm should remain in operation because its revenue is sufficient to cover variable costs and some fixed costs.

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Definitions:

Tax Rate

The percentage at which an individual or corporation is taxed by the government, applicable to income, capital gain, or other taxable bases.

IFRS 8

An International Financial Reporting Standard that requires companies to report financial information by business segment to provide a clearer understanding of a company’s performance.

Operating Segment

A component of an enterprise that engages in business activities earning revenues and incurring expenses, whose operating results are regularly reviewed by the enterprise's chief operating decision maker.

Quantitative Threshold

A specified numerical limit or benchmark that must be met or exceeded, often used in contexts like financial regulation or performance measurement.