Mark Owns a Cattle Station near Darwin

question 84

Multiple Choice

Mark owns a cattle station near Darwin. Mark is currently producing beef at an output level where marginal revenue exceeds marginal cost. In order to maximise his profit, Mark should

• A) decrease his output.
• B) shut down his cattle station.
• C) increase his output.
• D) not change his output.
• E) probably change his output, but more information is needed to determine if he should increase, decrease or not change it.

---

Definitions:

Incremental Value

The additional value created by undertaking a specific action or project, calculated as the difference between the value with the action and without it.

All-Stock Deal

A type of acquisition where the buyer company purchases another company using its own stock as currency, instead of cash.

Outstanding Stock

The total number of shares of a corporation's stock that are currently owned by all its shareholders, including share blocks held by institutional investors and restricted shares.

Incremental Value

The additional or extra value that is generated by undertaking a specific action, project, or investment compared to not doing so.