If a Potato Farmer Expands Output, He Finds That the Increase

question 197

Multiple Choice

If a potato farmer expands output, he finds that the increase in total revenue is less than the increase in total costs. This means that:

• A) profit is being maximized.
• B) he should not have expanded output.
• C) he should produce even more output.
• D) the firm is wasting resources.
• E) the farmer should go out of business.

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Definitions:

365-Day Year

A method used in finance that assumes all years have 365 days for the purpose of interest calculation.

High-Speed Copy Machine

An office machine designed for rapid copying of documents and images, capable of producing numerous copies within a short period.

Ordinary Simple Interest

A method of calculating interest where the interest charge is computed only on the principal amount, without compounding over a specified time period.

360-Day Year

A financial convention that simplifies the calculation of interest by assuming a year has 360 days.