Which of the Following Expressions Is Correct for a Competitive

question 154

Multiple Choice

Which of the following expressions is correct for a competitive firm?

• A)profit = (quantity of output) x (price - average total cost)
• B)marginal revenue = (change in total revenue)/(quantity of output)
• C)average total cost = total variable cost/quantity of output
• D)average revenue = (marginal revenue) x (quantity of output)

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Definitions:

Independent Variable

A variable in an experiment or model that is manipulated or changed to observe its effect on a dependent variable, without being affected by other variables.

Machine-Hours

A measure of production time that indicates the total hours machines were operated to complete a task or manufacture goods.

Relevant Range

The span of activity levels within which the assumptions about fixed and variable cost behaviors hold true, crucial for accurate budgeting and planning.

Variable Cost

A cost that varies directly with the level of production or business activity, such as materials and labor directly involved in production.