Suppose That There Are Just Two Firms in a Small

question 99

Multiple Choice

Suppose that there are just two firms in a small market.
Acme Manufacturing's Total Costs equal $100 + $3 × Quantity.
Generic Industries' Total Costs equal $500 + $3 × Quantity.
Refer to the information given above.If each firm is producing the same quantity:

• A)Acme has lower average total costs than Generic.
• B)Acme's average total costs are equal to Generic's variable costs.
• C)Acme has higher average total costs than Generic.
• D)at some levels of output,Acme's average total costs are less than Generic's,but at some levels of output,Generic's average costs are less than Acme's.

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Definitions:

Cash Disbursement

The payment of money from a fund or account, typically involving the transfer of cash to individuals or companies for services rendered or goods purchased.

Operating Cycle

The period from purchasing inventory to collecting cash from the sale of that inventory.

Accounts Receivable Financing

A type of financing arrangement in which a company uses its receivables as collateral for a loan, effectively selling its right to future payments in exchange for immediate cash.

Factored Receivables Financing

A financial transaction in which a business sells its accounts receivable to a third party at a discount in exchange for immediate cash.