Suppose a Firm in a Competitive Market Produces and Sells

question 267

Multiple Choice

Suppose a firm in a competitive market produces and sells 150 units of output and earns $1,800 in total revenue from the sales. If the firm increases its output to 200 units, the average revenue of the 200th unit will be

• A)less than $12.
• B)more than $12.
• C)$12.
• D)Any of the above may be correct depending on the price elasticity of demand for the product.

Recognize the relationship between franchisor and franchisee including roles and responsibilities.

Analyze the implications of agency problems such as adverse selection and moral hazard in business operations.

Explore the impact of compensation structures on employee behavior and organizational outcomes.

Examine strategies for managing and motivating staff in the face of technology-induced shirking.

---

Definitions:

Current Liability

Financial obligations or debts that are due to be paid within a year or within the normal operating cycle of a business.

GAAP

Stands for Generally Accepted Accounting Principles; the standard framework of guidelines for financial accounting used in any given jurisdiction, including the standards, conventions, and rules accountants follow in recording and summarizing transactions, and in the preparation of financial statements.

Compensated Absences

Employee benefits representing paid time off, such as vacation, sickness, or personal leave, accrued by employees.

Vacation Pay

A benefit offered by employers that compensates employees while they are on leave from work for a vacation.