For a Certain Firm, the 100th Unit of Output That

question 44

Multiple Choice

For a certain firm, the 100th unit of output that the firm produces has marginal revenue equal to $10 and a marginal cost of $7. It follows that

• A) the production of the 100th unit of output increases the firm's profit by $3.
• B) the production of the 100th unit of output increases the firm's average total cost by $7.
• C) the firm's profit-maximizing level of output is less than 100 units.
• D) the production of the 110th unit of output must increase the firm's profit by less than $3.

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Definitions:

Effective Rate

The actual interest rate an investor receives after the effects of compounding interest are taken into account.

Compounding Interval

The period of time at the end of which interest is added to the principal balance of an investment or loan.

Interest

The charge for borrowing money or the return on invested capital, generally expressed as a percentage rate.

Furniture

Movable objects intended to support various human activities such as seating, eating, and sleeping, as well as to hold objects or store items.