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.

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Definitions:

End-of-period Spreadsheet

A tool used for accounting that summarizes all accounts and balances at the end of a period to prepare financial statements.

Balance Sheet Columns

The sections in a balance sheet that categorize and display a company's assets, liabilities, and shareholders' equity at a specific point in time.

Net Income

The complete income of a company once all costs and taxes are subtracted from its total revenue.

Net Loss

The result when a company's total expenses exceed its total revenues during an accounting period, indicating a decrease in owner's equity.