At an Output Level of 500 Units,ATC = $10,AVC =

question 120

Multiple Choice

At an output level of 500 units,ATC = $10,AVC = $5,MR = $3 and MC = $3,the result for the perfectly competitive firm will be:

• A)making a loss of ($5 - $3) ´ 500 = $1000.
• B)a decrease in output, so MC > MR.
• C)making a short-run loss of $2500.
• D)an increased output, so MR > MC.
• E)unclear, as there is not enough information.

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Definitions:

Operating Activities

Operating activities involve the primary day-to-day functions of a business related to producing and selling its goods and/or services, reflected in the cash flow statement.

Investing Activities

Transactions involving the purchase or sale of long-term assets and other investments not considered cash equivalents.

Financing Activities

involve transactions related to raising capital and repaying investors, including issuing equity, obtaining loans, and paying dividends.

Direct Method

A cash flow statement preparation approach showing actual cash inflows and outflows from operating activities without adjustments for non-cash transactions.