Use the Following to Answer Questions

question 148

Multiple Choice

Use the following to answer questions:
Figure: The Restaurant Market
-(Figure: The Restaurant Market) The figure The Restaurant Market shows curves facing a typical restaurant. Assume that many firms, differentiated products, and easy entry and exit characterize the restaurant market. If the restaurant shown here were to raise its price above the profit-maximizing price, its total revenue would:

• A) decrease.
• B) increase.
• C) not change.
• D) Not enough information is given to answer the question.

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Definitions:

Depreciation Estimates

Projections or calculations made regarding the decrease in value of tangible assets over time due to use, wear, or obsolescence.

Depreciation Method

A systematic approach to allocating the cost of a tangible asset over its useful life.

Fixed Assets

Fixed assets are long-term tangible assets intended for use in the production or supply of goods or services, not easily converted to cash within a year.

Residual Value

The estimated salvage value of an asset after its useful life is over.