Compared to Its Initial Position,a Typical Firm in New Short-Run

question 50

Multiple Choice

Compared to its initial position,a typical firm in new short-run equilibrium

• A) finds its average fixed cost higher.
• B) increases its plant size.
• C) finds its marginal cost higher.
• D) makes less profit.
• E) reduces average variable cost.

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Definitions:

Gross Profit

The difference between sales revenue and the cost of goods sold, indicating the efficiency of a company's core operations.

Direct Departmental Expenses

Costs that can be directly attributed to a specific department within an organization, such as salaries of departmental staff.

Indirect Expenses

Expenses that are not directly tied to the production of goods or services, such as administrative and marketing costs.

Contribution Margin

The amount remaining from sales revenue after variable costs are deducted, contributing to covering fixed costs and generating profit.