If a Competitive Firm Is Currently Producing a Level of Output

question 418

Multiple Choice

If a competitive firm is currently producing a level of output at which marginal revenue exceeds marginal cost, then

• A)a one-unit increase in output will increase the firm's profit.
• B)a one-unit decrease in output will increase the firm's profit.
• C)total revenue exceeds total cost.
• D)total cost exceeds total revenue.

---

Definitions:

Partnerships

A form of business organization in which two or more individuals share ownership, responsibilities, and the profits or losses of the enterprise.

Corporations

Legal entities that are separate from their owners, providing limited liability protection, and have the ability to raise capital by issuing shares.

19th Century

The period from January 1, 1801, to December 31, 1900, marking the nineteenth century of the Gregorian calendar.

Gross Investment

The sum of money used to acquire new capital assets, not considering depreciation expenses.