Ordinary Repairs Are Expenditures to Maintain the Operating Efficiency of a Plant

question 256

Multiple Choice

Ordinary repairs are expenditures to maintain the operating efficiency of a plant asset and are referred to as

• A) capital expenditures.
• B) expense expenditures.
• C) improvements.
• D) revenue expenditures.

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Definitions:

Short-run

A timeframe in economics during which at least one factor of production is fixed and cannot be changed.

MC

is an abbreviation for Marginal Cost, which represents the change in total cost that arises when the quantity produced is incremented by one unit.

ATC

Average Total Cost is determined by dividing the total production expense by the output quantity.

Perfectly Competitive Firm

A firm that operates in a market where there are many buyers and sellers, the products are homogeneous, and no single buyer or seller can influence the market price.