If a Firm Is Using a Factor of Production from a Perfectly

question 31

Multiple Choice

If a firm is using a factor of production from a perfectly competitive market such that MFC < MRP, then profit:

• A) is maximized.
• B) can be increased by using less of the factor.
• C) can be increased by using more of the factor.
• D) can be increased by increasing the factor price.

---

Definitions:

Betterments

Improvements made to a property or asset that increase its value or productivity.

Plant Asset

Plant asset is a long-term physical asset used in the production process of a company, such as machinery, buildings, and equipment.

Revenue Expenditures

Expenses that are directly matched with revenues for a specific period, typically affecting the income statement immediately.

Units-of-production

A depreciation method that allocates the cost of an asset over its useful life based on the amount of production the asset is capable of.