A Purely Competitive Firm Is Producing at the Point Where

question 71

Multiple Choice

A purely competitive firm is producing at the point where its marginal cost equals the price of its product.If the firm increases its output, then total revenue will

• A)increase and profits will increase.
• B)decrease and profits will increase.
• C)increase and profits will decrease.
• D)decrease and profits will decrease.

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Definitions:

Cost of Debt

The effective rate that a company pays on its total debt, reflecting the expense of borrowing funds.

Straight-Line Depreciation

A method of allocating an asset's cost evenly across its useful life.

After-Tax Annual Lease Payment

The amount of money paid every year for a lease after accounting for taxes.

Tax Rate

The fraction of earnings or revenue that governmental bodies levy as tax from individuals or corporations.