If a Firm Decides to Make the Investment Decision to Expand

question 32

Multiple Choice

If a firm decides to make the investment decision to expand its capacity,then it must have discovered that

• A)P = ATC.
• B)P > AVC.
• C)P > ATC.
• D)P = AVC.

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Definitions:

Debit Account

A bookkeeping record that raises the value of an asset or expense, or lowers the value of a liability or equity.

Credit Account

A Credit Account is a type of financial account that records the amounts that are owed by a business to its suppliers or creditors, which are typically settled at a later date.

General Ledger

A complete record of all financial transactions made over the life of a company.

Asset Accounts

Accounts on a company's balance sheet that represent valuable resources controlled by the company and that have future economic value.