In the Short Run, a Profit-Maximizing Price Taker Will Expand

question 129

Multiple Choice

In the short run, a profit-maximizing price taker will expand output as long as the market price exceeds

• A) average variable cost.
• B) marginal cost.
• C) average total cost.
• D) average fixed cost.

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Definitions:

Return on Investment

A profitability metric that measures the gain or loss generated on an investment relative to the amount of money invested.

Operating Assets

Assets required for a company to conduct its daily business operations, including both current and long-term assets.

Margin

The difference between the sales price of a good or service and its cost, expressed as a percentage of the sales price.

Investment Centre

A segment or area of a business responsible for both its revenue and its investments.