A Profit-Maximizing Firm Will Continue to Expand Output

question 27

Multiple Choice

A profit-maximizing firm will continue to expand output:

• A) as long as the revenues from the production and sale of an additional unit exceeds the average cost of the unit.
• B) until the average cost of producing the good or service is at a minimum.
• C) as long as the revenues from the production and sale of an additional unit exceeds the marginal cost of the unit.
• D) until the marginal cost of producing a good or service is at a minimum.

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Definitions:

Volcanic Mudflows

Also known as lahars, these are rapid flows of debris, mud, and water that descend from a volcano, typically following an eruption or heavy rainfall.

Flow-Banded Rhyolite

A type of volcanic rock characterized by bands of alternating texture or color, formed by the flow of viscous silicate lava.

Viscous Lava

Lava that has a high viscosity, meaning it flows slowly due to its thick, sticky consistency.

Lateral Blast

A volcanic eruption characterized by the powerful, horizontal expulsion of ash, gas, and volcanic debris, often occurring with little to no warning.