When a Firm Experiences Continually Declining Average Total Costs, the Firm

question 445

Multiple Choice

When a firm experiences continually declining average total costs, the firm is a

• A)government-created monopoly.
• B)price taker.
• C)natural monopoly.
• D)revenue maximizer.

---

Definitions:

Tax Rate

The extent to which the government extracts a percentage of income as taxes from businesses or people.

Market Value

The current exchange rate for acquiring or disposing of a service or asset.

Bond Issue

A financial instrument issued by a corporation or government as a way of borrowing money, where the issuer promises to pay back the face value on a specific date, along with periodic interest payments.

Weighted Average Cost of Capital (WACC)

A calculation of a firm's cost of capital, weighted by the proportion of each component of capital, including debt and equity.