If a Competitive Firm Is in Short-Run Equilibrium, Then

question 146

Multiple Choice

If a competitive firm is in short-run equilibrium, then

• A) marginal revenue is equal to marginal cost.
• B) price is greater than marginal cost.
• C) price is equal to average variable cost.
• D) price is greater than marginal revenue.

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Definitions:

Step-Down Method

A cost allocation method used in accounting to distribute overhead costs from service departments to production departments and then to specific products or services.

Split-Off Point

The point in processing at which all joint costs have been incurred.

Relative Net Realizable Values

A method used to allocate joint costs based on the estimated final sales value of products minus any additional processing costs.