Which of the Following Statements Is True? (I)

question 337

Multiple Choice

Which of the following statements is true? (i)
When a competitive firm sells an additional unit of output, its revenue increases by an amount less than the price.(ii)
When a monopoly firm sells an additional unit of output, its revenue increases by an amount less than the price.(iii)
Average revenue is the same as price for both competitive and monopoly firms.

• A)(ii) only
• B)(iii) only
• C)(i) and (ii) only
• D)(ii) and (iii) only

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Definitions:

Deferred Compensation

A portion of an employee's compensation that is set aside to be paid out at a later date, often used as a retirement benefit.

Treasury Stock

Shares of a company’s own stock that it has reacquired from shareholders but not retired, listed as a contra equity account on the balance sheet.

Common Stock Optionwarrants

Equity derivatives that give the holder the right to purchase common stock at a specified price within a certain time period.

Unrealized Increase

The potential gain in the value of an investment that has not yet been sold and thus not yet converted into actual profit.