A Competitive Firm Chooses The

question 131

Multiple Choice

A competitive firm chooses the:

• A)price at which to sell the product produced.
• B)wage to pay labour.
• C)quantity of labour and capital to employ.
• D)rental price to pay capital.

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Definitions:

Period Costs

Expenses that are not directly tied to the production of goods and are expensed in the period in which they are incurred.

Average Costs

The cost per unit calculated by dividing the total cost of production by the number of units produced.

Variable Cost

Expenses that change in direct proportion to the amount of goods or services produced.

Fixed Cost

Expenses that do not change with the level of production or sales, such as rent, salaries, and loans.