Which of the Following Statements Is Correct

question 148

Multiple Choice

Which of the following statements is correct?

• A)In the long run, both perfectly competitive firms and monopolistically competitive firms operate with excess capacity.
• B)A firm operates with excess capacity when, in the long run, its level of output is below the efficient scale.
• C)For any firm, efficient scale is the level of output at which the average-total-cost curve is tangent to the demand curve.
• D)All of the above are correct.

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Definitions:

Profit and Loss Ratio

Measures the efficiency of a company in generating profits from its operations, calculated by dividing net profit by net sales.

Liquidation Expenses

Costs associated with the process of winding down a company's business operations and distributing its assets to claimants.

Carrying Amount

The book value of an asset or liability on a company's balance sheet, reflecting adjustments like depreciation or amortization.

Loan Receivable

An amount of money that is loaned to another party in exchange for future repayment of the loan value or principal amount, along with interest or other finance charges.