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:

Accounts Payable

The liabilities a company has to its vendors or lending parties for products and services it has received but for which payment has not been made.

Net Method

A way of recording purchases or sales of goods that directly factors in any discounts or allowances at the time of the transaction.

Gross Method

An accounting method for recording purchases at the full invoice price without deducting any cash discounts offered.

Cash Discounts

A reduction in the amount owed by a customer if payment is made within a specified time frame.