The Demand Curve Facing the Firm Has Been Estimated as Follows

question 75

Multiple Choice

The demand curve facing the firm has been estimated as follows:

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Which of the following statements about the firm's total revenue is correct?

• A)If the firm sold 3 units of output,it would have revenues totaling $540.
• B)If the firm sold 7 units of output,it would have revenues totaling $560.
• C)If the firm increased output from 2 units to 3 units,total revenue would decline.
• D)If the firm decreased output from 7 units to 6 units,total revenue would decline.
• E)If the firm decreased output from 6 units to 5 units,total revenue would decline.

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Definitions:

Gross or Net Basis

A method used in accounting to determine whether all revenues and costs or only the net difference is recorded.

SEC

The U.S. Securities and Exchange Commission, which is responsible for enforcing federal securities laws and regulating the securities industry, stock and options exchanges.

Revenue Recognition Irregularities

Deviations or non-compliance from standard accounting practices in acknowledging revenue, which can lead to misstated financial reports.

Negative Earnings

A financial situation where a company's expenses exceed its revenues, leading to a net loss in its income statement.