In the Long Run,if a Firm's Total Cost Exceeds Its

question 14

Multiple Choice

In the long run,if a firm's total cost exceeds its total revenue at all output levels,it should

• A)always exit the industry
• B)always continue operating
• C)increase the amount of its fixed inputs
• D)increase the proportion of its total cost that is fixed
• E)maximize the difference between its marginal revenue and its marginal cost

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Definitions:

Activity-Based Costing

A pricing approach that allocates overheads and indirect expenses to particular tasks, resulting in more precise cost estimation for products.

Activity Rate

A measure used in activity-based costing to allocate overhead costs to products or services.

Order Filling

The process of completing a customer's order, from picking and packing the items to shipping them.

Product Margin

Product margin refers to the difference between the selling price of a product and the cost of goods sold, representing the profit made on each product sold.