If a Perfectly Competitive Firm Is Producing 1,500 Units And

question 32

Multiple Choice

If a perfectly competitive firm is producing 1,500 units and, at the 1,500th unit, the difference between marginal revenue and marginal cost (MR - MC) is negative, which of the following is true?

• A)The firm should decrease production to maximize profit.
• B)The 1,500th unit costs less to produce than the firm earns in revenue.
• C)The firm is maximizing profit.
• D)The firm should increase production to maximize profit.

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Definitions:

Office Supplies Account

An account used to track expenses related to materials and supplies used in an office environment.

Adjusting Entry

At the closure of an accounting period, entries are documented to attribute earnings and outlays to the span during which they genuinely happened.

Supplies Purchased

Represents the purchase of tangible goods or materials used in the production of goods or for the operation of the company.

Accrued Revenues

Accrued revenues are revenues that have been earned but not yet received in cash or recorded, representing assets on the balance sheet.