Time Lags Between the Production Decision and the Resultant Harvest

question 36

Multiple Choice

Time lags between the production decision and the resultant harvest contribute to

• A)Profit.
• B)Loss.
• C)Price instability.

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Definitions:

Marginal Revenue

The additional income from selling one more unit of a good; sometimes equal to the price of the good.

Marginal Cost

The increase or decrease in the total cost that arises from producing one additional unit of a product or service.

Profit

Earnings resulting from conducting business, after subtracting all operational costs, taxes, and expenses from total revenue.

Tacit Collusion

An unspoken, informal agreement among competitors to avoid certain competitive behaviors, like price undercutting.