When a Perfectly Competitive Firm Weighs Price and Marginal Cost

question 262

Multiple Choice

When a perfectly competitive firm weighs price and marginal cost and no externalities exist, it is weighing the ________ benefits to society of additional production against the ________ costs to society of that production.

• A) full; full
• B) marginal; marginal
• C) marginal; full
• D) full; marginal

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Definitions:

Fair Value

The price at which an asset or liability could be exchanged between knowledgeable, willing parties in an arm's length transaction.

Spot Rates

The existing selling or buying price of a certain asset that is ready for instant delivery.

IFRS 9

International Financial Reporting Standard 9, dictating the accounting for financial instruments, including recognition, measurement, and impairment of assets.

Accounts Receivable

Money owed to a business by its clients or customers for goods or services delivered or used but not yet paid for.