Which of the Following Is True at the Level of Output

question 477

Multiple Choice

Which of the following is true at the level of output at which a competitive firm maximizes profit?

• A)price = marginal cost
• B)price = wage/value of marginal product of labor
• C)price = marginal product of labor/wage
• D)All of the above are correct.

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Definitions:

WACC

Weighted Average Cost of Capital, a calculation that reflects the cost of a company to finance its assets through a mix of equity and debt.

Level of Risk

The level of risk and possible monetary loss associated with making an investment choice.

Weighted Average Cost

A measure that calculates the average cost of goods available for sale, considering the weight of each unit's cost.

Cost of Equity

The rate of return that a company is expected to pay out to its shareholders for their investment in the company, factoring in the risk of the investment.