If It Does Not Shut Down,a Perfectly Competitive Firm Produces

question 132

Multiple Choice

If it does not shut down,a perfectly competitive firm produces where marginal cost is equal to the marginal revenue

• A) only in the short run.
• B) only in the long run.
• C) always to maximize its profit.
• D) only if it is not possible to produce where price equals average variable cost.
• E) only if it is not possible to produce where price is greater than average total cost.

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Definitions:

Cost Reconciliation

A process used in cost accounting to verify the difference between the cost of inputs and the cost of outputs within a reporting period.

Work in Process Inventory

The value of partially completed goods in manufacturing at a specific point in time; these goods are not yet finished products.

Costs Added

Additional expenses incurred during a production or service process, which could include raw materials, labor or overhead costs.

Weighted-Average Method

A cost accounting methodology that calculates unit costs by combining the costs and outputs from two or more periods, smoothing out fluctuations.