In the Short Run, a Competitive fiRm Will Maximize Profits

question 61

Multiple Choice

In the short run, a competitive firm will maximize profits by expanding output when _____.

• A) average total cost is greater than price
• B) marginal cost is greater than price
• C) price is greater than marginal cost
• D) price is greater than average total cost

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Definitions:

Forecasting

The process of making predictions about future events, often involving the analysis of data and trends to inform business decisions.

Net Income Recognition

Net income recognition refers to the point at which revenues minus expenses are realized and reported in the financial statements, determining the profitability of a company for the period.

Net Assets

The total value of an entity's assets minus its liabilities, representing the owners' equity.

Assets

Assets are resources owned by a business or individual that have economic value and can be used to meet debts, commitments, or legacies.