A Firm Is Currently Operating Where the MC of the Last

question 156

Multiple Choice

A firm is currently operating where the MC of the last unit produced is $84, and the MR of this unit is $70. What would you advise this firm to do?

• A) Shut down.
• B) Increase output.
• C) Stay at its current output.
• D) Decrease output.
• E) Decrease price.

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Definitions:

Budgeting

The process of creating a plan to spend your money over a certain period, outlining projected income and expenses.

Continuous Budgeting

A budgeting approach that continuously updates the budget by adding a new period (month, quarter, etc.) as the current period is completed.

Annual Period

A 12-month time frame over which a business's financial performance is evaluated, which does not necessarily align with the calendar year.

Credit Sales

Sales in which the customer is allowed to pay at a later date, typically implicating the extension of credit from the seller to the buyer.