-Which of the Following Statements Would Be True About a Firm

question 159

Multiple Choice

-Which of the following statements would be true about a firm which has excess capacity?

• A)Its average total cost would be at a minimum.
• B)Its average total cost would not be at a minimum.
• C)Its average total cost may or may not be at a minimum but the firm would not be at economic capacity.
• D)It would not be at capacity output,but its average total cost would be at a minimum.
• E)It would need to reduce output to achieve minimum average total cost.

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Definitions:

Financing Activities

Transactions that involve raising funds to finance the company's operations and expansions, such as issuing stocks or bonds.

Investing Activities

Transactions involving the purchase or sale of long-term assets and investments not included in cash equivalents.

Direct Method

A cash flow statement presentation method that shows the specific sources and uses of cash, detailing actual cash received and paid.

Cash Payments

Cash payments refer to transactions where cash is used to settle the amount owed for goods or services.