As the Firm's Variable Costs Rise

question 59

Multiple Choice

As the firm's variable costs rise,

• A)The number of firms will rise in the long run
• B)The number of firms will fall in the long run
• C)The number of firms will stay the same in the long run
• D)It is impossible to tell from the information given

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Definitions:

Future Sales

Projected revenue figures based on historical data, market analysis, and other predictive models, indicating the expected amount of products or services a company will sell.

Accounts Receivable Period

The average number of days it takes a company to collect payment after a sale has been made, indicative of cash flow and credit practices.

Operating Cycle

The duration of time from the acquisition of goods for resale or the start of a service to the receipt of payment from customers.

Cash Cycle

The period between the outlay of cash for raw materials and receiving payment from customers, reflecting the efficiency of a company's cash flow management.