To Maximize Profits,a Perfectly Competitive Firm Should Increase Output

question 305

Multiple Choice

To maximize profits,a perfectly competitive firm should increase output

• A)until price is greater than average total cost.
• B)until price is equal to marginal cost.
• C)until total cost is less than total revenue.
• D)until marginal cost is equal to average variable cost.
• E)until marginal revenue is equal to total cost.

Calculate markup percentages and price determination based on total costs.

Evaluate make or buy decisions considering relevant costs.

Identify costs not relevant to specific financial decisions.

Assess the financial impact of eliminating a business segment on operating income.

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Definitions:

Disposable Income

Money available to families for savings and expenses after accounting for income taxes.

C+ I

An economic term representing total consumption (C) and investment (I) in an economy, key components of the gross domestic product (GDP).

Disposable Income

The amount of money that households or individuals have available for spending and saving after income taxes have been accounted for.

Disposable Income

Available financial resources for households to save and spend, post-income tax deductions.