Exhibit 6-4 -For a Competitive Firm, If Any Level of Production Results

question 151

Multiple Choice

Exhibit 6-4
-For a competitive firm, if any level of production results in losses, the loss-minimizing output level is when

• A)marginal product equals marginal cost.
• B)marginal revenue equals marginal cost.
• C)price equals marginal revenue.
• D)total revenue equals total cost.
• E)average revenue equals average cost.

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Definitions:

Annual Rate Of Return

The percentage of profit or loss on an investment over a one-year period.

Accumulated Depreciation

The total amount of a tangible fixed asset's cost that has been charged to depreciation expense since the asset was acquired.

Salvage Value

The estimated resale value of an asset at the end of its useful life, after depreciation has been taken into account.

Labor Costs

The total amount of compensation, including wages, salaries, and benefits, paid to employees for their work.