In Pure Competition, Each Extra Unit of Output That a Firm

question 141

Multiple Choice

In pure competition, each extra unit of output that a firm sells will yield a marginal revenue that is

• A) equal to the price.
• B) less than the price.
• C) greater than the price.
• D) equal to the average cost.

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Definitions:

Average Accounting Return

A financial ratio indicating the average net income an asset is expected to generate compared to its average capital cost.

Redeeming Feature

A characteristic or option in a financial product that offers the possibility of benefitting the holder, such as the ability to convert bonds into stock.

Required Return

The minimum expected yield by investors for investing in a particular asset, considering its risk.

Independent Projects

Projects that are evaluated for investment purposes, where the acceptance of one project does not affect the decision to undertake another.