The Need for Operating Funds

question 227

Multiple Choice

The need for operating funds:

• A)eventually is eliminated as a business matures.
• B)increases when a firm introduces new products or enters a new market.
• C)is established by relevant government laws and regulations.
• D)remains constant regardless of the activities of the firm.

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Definitions:

Market Price

The current price at which a good or service can be bought or sold in a marketplace, determined through the supply and demand dynamics.

Average Revenue

Average revenue refers to the amount of money generated per unit of product sold, calculated by dividing total revenue by the number of units sold.

Marginal Cost

The additional expenditure required to produce one more unit of a product or service.

Marginal Revenue

The additional income that is generated from selling one more unit of a good or service.