Which of the Following Statements Is False When a Company

question 115

Multiple Choice

Which of the following statements is false when a company sells inventory costing $900 for $1,500 cash?

• A)Current assets increase $600.
• B)Gross profit increases $1,500.
• C)Stockholders' equity increases $600.
• D)Net sales increases $1,500.

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Definitions:

Marginal Cost

The increase in total production cost that comes from making or producing one additional unit of a good.

Excess Capacity

A scenario where a firm's actual production is less than its maximum potential output, often leading to inefficiencies and higher costs.

Monopolistically Competitive

Describes a market structure where many firms sell products that are similar but not identical, allowing for competition based on factors other than just price, such as brand and quality.

Demand Curves

Graphical representations that show the relationship between the price of a good or service and the quantity demanded by consumers at various price levels.