If Price Is Greater Than Marginal Cost for the Last

question 25

Multiple Choice

If price is greater than marginal cost for the last unit produced:

• A) Profit is increasing.
• B) Profit is decreasing.
• C) Only economic costs are being covered.
• D) Average total cost is covereD.

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Definitions:

Total Revenue

The total amount of money received by a company for goods sold or services provided during a certain time period.

Total Cost

The overall amount of money spent on production, which includes both fixed and variable expenses.

Market Price

The prevailing market rate at which a service or asset is offered for purchase or sale.

Firm

A business organization, such as a corporation, partnership, or sole proprietorship, that sells goods or services in exchange for money.