Scenario 9.2 Consider a Publicly Held Firm (One Whose Stock Shares Are

question 132

Multiple Choice

Scenario 9.2
Consider a publicly held firm (one whose stock shares are traded on the stock exchange) that earned revenue worth $350 million and incurred land, labor, and debt costs worth $320 million. The stockholders who have invested a total of $100 million in this firm could have earned 10 percent return on other comparable investments.
-At the profit-maximizing output level, an increase in price by a perfectly competitive firm will:

• A)cause an increase in profits.
• B)reduce total cost more than total revenue.
• C)increase total revenue more than total cost.
• D)increase total cost more than total revenue.
• E)cause the firm to lose all of its sales.

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