A Firm in Competitive Price-Taker Market Is Maximizing Profit at Q

question 35

Multiple Choice

A firm in competitive price-taker market is maximizing profit at Q = 3,000. Then its fixed cost increases. The profit-maximizing output is now

• A) greater than 3,000 and profit decreases
• B) less than 3,000 and profit decreases
• C) greater than 3,000 and profit is unchanged
• D) equal to 3,000 and profit decreases
• E) equal to 3,000 and profit increases

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Definitions:

Inventory Turnover

A measure of how many times a company's inventory is sold and replaced over a particular period, indicating efficiency in inventory management.

Annual Reports

Comprehensive reports produced annually by companies to detail their financial performance, operations, and future outlook.

Year-End Inventory

Year-End Inventory is the total value of all inventory held by a company at the end of its fiscal year, crucial for financial reporting and tax calculations.

Weighted Average Cost

A method of inventory valuation that calculates the cost of goods sold and ending inventory based on the average cost of all units available for sale.