Scenario 14-3 Suppose a Certain Competitive Firm Is Producing Q=500 Units of Units

question 586

Multiple Choice

Scenario 14-3
Suppose a certain competitive firm is producing Q=500 units of output. The marginal cost of the 500th unit is $17, and the average total cost of producing 500 units is $12. The firm sells its output for $20.
-Refer to Scenario 14-3. At Q=500, the firm's profits equal

• A)$1,000.
• B)$4,000.
• C)$7,000.
• D)$10,000.

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Definitions:

IFRS 3

International Financial Reporting Standard that deals with the accounting for business combinations, guiding how companies should reflect mergers and acquisitions.

Acquisition Method

An approach in accounting for business combinations where the acquirer applies the fair value to the identifiable assets and liabilities of the acquired entity.

Issuing Debt

The act of a company borrowing money through the sale of securities like bonds to investors.

Amortized

The gradual reduction of a debt or the cost of an intangible asset over a specific period, typically through regular payments or writedowns.