Which of the Following Conditions Would Indicate That a Perfectly

question 37

Multiple Choice

Which of the following conditions would indicate that a perfectly competitive firm should expand its output to increase its profit?

• A) Marginal cost equals average cost.
• B) Total cost exceeds marginal cost.
• C) Price exceeds marginal cost.
• D) Total revenue exceeds total cost.
• E) Total revenue equals price.

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Definitions:

Break-Even

The point at which total costs equal total revenues, meaning a business is not making a profit but is not losing money either.

Sales Dollars

Represents the total monetary value of sales transactions made within a specific period, not accounting for costs or profits.

Grocery Division

A subdivision within a retail company focused on the selling of food and household goods.

Absorption Costing

A financial strategy that absorbs all the manufacturing outlays, encompassing direct materials, workforce costs, alongside both adaptable and unchanging manufacturing overheads, into the cost of a product.