Suppose That a Firm Operating in Perfectly Competitive Market Sells

question 178

Multiple Choice

Suppose that a firm operating in perfectly competitive market sells 400 units of output at a price of $4 each. Which of the following statements is correct? (i)
Marginal revenue equals $4.
(ii)
Average revenue equals $100.
(iii)
Total revenue equals $1,600.

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

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Definitions:

Desired Rate

An anticipated rate of return on investment or interest rate target, often set as a benchmark for financial decisions or investment appraisal.

Present Value Index

A calculation used to assess the profitability of an investment relative to its current cost, by discounting future cash flows.

Total Present Value

The sum of the present values of future cash flows expected from an investment or project, used in evaluating its attractiveness.

Net Cash Flow

The amount of cash generated or spent over a specific period, typically the result of operating, investing, and financing activities.