The Following Figure Shows the Total Cost and Total Revenue

question 94

Multiple Choice

The following figure shows the total cost and total revenue for a firm when it prices its products at $8 and $10.
Figure 9-1
-In Figure 9-1,if the market price fell to $8 the firm would:

• A)decrease production to OJ and would be operating at a loss.
• B)decrease production to OJ and would be earning a normal return.
• C)decrease production to OF where it would break even.
• D)incur losses and shut down.

---

Definitions:

Current Yield

The annual income (interest or dividends) divided by the current price of the security, often used in relation to bonds to describe the percentage return based on the bond's current market price.

Coupon Bonds

Bonds that pay the holder a fixed interest rate (coupon) over the life of the bond, and then return the principal at maturity.

Par Value

The nominal or face value of a bond, share of stock, or other financial instrument, as stated by the issuing entity.

At Issue

A term often used when new securities are released to the market, indicating they are currently being offered for sale to the public.