When the Marginal Cost of a Price-Taker Firm Is More

question 89

Multiple Choice

When the marginal cost of a price-taker firm is more than the market price of its product, the firm should

• A) expand output.
• B) reduce output.
• C) maintain output.
• D) charge more than the market price.

---

Definitions:

Depreciated

A reduction in the value of an asset over time, often due to wear and tear or obsolescence, which is accounted for in accounting to spread the cost over its useful life.

Marginal Tax Rate

The marginal tax rate is the rate at which the last dollar of income is taxed, reflecting the rate applied to an individual's or entity's highest level of income.

Marginal Tax Rate

The rate at which the next dollar of taxable income will be taxed.

Operating Costs

Expenses associated with the day-to-day functions of a business, excluding financial costs.