If a Firm Finds That Its Marginal Cost Is Greater

question 11

Multiple Choice

If a firm finds that its marginal cost is greater than its price,it

• A)Should reduce production.
• B)Is maximizing its profit.
• C)Should increase production.

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Definitions:

Machinery

Machines or machine systems collectively, especially when considered as components of a production or manufacturing process.

Net Working Capital

The difference between a company's current assets and current liabilities, representing its short-term financial health and efficiency.

Operating Income

The profit realized from a company's core business operations, excluding deductions of interest and tax.