Which of the Following Statements Is True? (I)

question 337

Multiple Choice

Which of the following statements is true? (i)
When a competitive firm sells an additional unit of output, its revenue increases by an amount less than the price.(ii)
When a monopoly firm sells an additional unit of output, its revenue increases by an amount less than the price.(iii)
Average revenue is the same as price for both competitive and monopoly firms.

• A)(ii) only
• B)(iii) only
• C)(i) and (ii) only
• D)(ii) and (iii) only

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Definitions:

Tax-Exempt

Financial earnings that are not subject to taxation by the government, often applied to certain bonds and municipal securities.

Preferred Stock

Nonvoting shares in a corporation, paying a fixed or variable stream of dividends.

Cumulative Dividends

Dividends that are owed to preferred shareholders of a company and must be paid out before dividends can be distributed to common shareholders.

Voting Power

Voting power refers to the number of votes a shareholder has in a company's decisions, typically based on the number of shares held.