FIGURE 8-1 -Refer to Figure 8-1.For Which of the Four Firms Is

question 39

Multiple Choice

FIGURE 8-1
-Refer to Figure 8-1.For which of the four firms is output increasing less than in proportion to inputs for all output levels?

• A)Firm A
• B)Firm B
• C)Firm C
• D)Firm D
• E)none of the four firms

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Definitions:

Average Cost

A method of inventory costing that determines the cost of goods sold and ending inventory based on the weighted average cost of all purchases.

Gross Profit Method

A technique used to estimate the amount of ending inventory using the gross profit margin.

Net Realizable Value

The expected selling price in the ordinary course of business minus the estimated costs of completion and the costs necessary to make the sale.

Normal Selling Price

The standard amount charged to customers for a good or service under normal market conditions.