A Perfectly Competitive Firm Sells Its Output for $100 Per

question 111

Multiple Choice

A perfectly competitive firm sells its output for $100 per unit and marginal cost is $100 per unit. To maximize short-run profit, the firm should:

• A) increase output.
• B) decrease output.
• C) maintain its current output.
• D) shut down.

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Definitions:

Long-term Liability

Long-term Liability is any financial obligation of a business that is due for a period exceeding one year, such as bonds payable, long-term loans, and lease obligations.

Premium on Bonds Payable

The amount by which the sale price of a bond exceeds its face value, representing additional cost to the issuer over the bond's life.

Bonds Payable

Long-term debt securities issued by a company to investors, indicating a promise to pay the principal amount at a specified maturity date along with periodic interest payments.

Journal Entry

A record of a financial transaction within a company's accounting system, indicating the affected accounts and their respective debit or credit amounts.