If Ol' Fashioned Toys' Revenues Are Greater Than Its Expenses

question 10

Multiple Choice

If Ol' Fashioned Toys' Revenues are greater than its Expenses during the accounting period:

• A) Assets will increase more than Liabilities.
• B) Liabilities will increase more than Assets.
• C) the business will incur a loss.
• D) the business will earn a net income.

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Definitions:

Consumer Willingness

The maximum amount a consumer is ready to pay for a good or service, reflecting their valuation of it.

Marginal Revenue

The added revenue obtained from trading an additional unit of a product or service.

Decreasing Cost Industry

An industry where an increase in production leads to a decrease in the average cost of producing each unit, often due to economies of scale.

Marginal Cost

Marginal cost refers to the increase in total cost that arises from producing one additional unit of a good or service.