If a Competitive Firm Is Currently Producing a Level of Output

question 113

Multiple Choice

If a competitive firm is currently producing a level of output at which marginal cost exceeds marginal revenue,then

• A)average revenue exceeds marginal cost.
• B)the firm is earning a positive profit.
• C)a one-unit decrease in output would increase the firm's profit.
• D)All of the above are correct.

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Definitions:

Merchandise Inventory

Goods a company has in stock and available for sale, typically in a retail or wholesale setting.

Inventory Shrinkage

The loss of products between purchase and sale, often due to theft, damage, or errors in counting.

Physical Count

The process of counting the actual number of items in inventory, typically to verify accounting records or when preparing financial statements.

Net Method

An accounting method that records purchases at the net price after deduction of any purchase discounts.