A Profit-Maximizing Firm Will Continue to Expand Output

question 27

Multiple Choice

A profit-maximizing firm will continue to expand output:

• A) as long as the revenues from the production and sale of an additional unit exceeds the average cost of the unit.
• B) until the average cost of producing the good or service is at a minimum.
• C) as long as the revenues from the production and sale of an additional unit exceeds the marginal cost of the unit.
• D) until the marginal cost of producing a good or service is at a minimum.

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Definitions:

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, resulting in a net income or loss.

Days' Sales Uncollected

Measures the average amount of time it takes a company to collect cash from credit sales.