In the Short Run, If a Firm in a Perfectly

question 53

Multiple Choice

In the short run, if a firm in a perfectly competitive market is producing at a point where price exceeds marginal cost, the profit-maximizing firm

• A) should increase its output.
• B) should decrease its output.
• C) should not change its output level.
• D) is maximizing its profits.

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Definitions:

Raw Materials Inventory

The stock of base materials used in the manufacturing process before being processed into finished goods.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a period, indicating the efficiency of inventory management and sales performance.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials and labor costs.

Period

A length of time in financial reporting, often quarterly or annually, used to evaluate business performance.