At an Output Level of 100 Units, TC = $1000

question 27

Multiple Choice

At an output level of 100 units, TC = $1000, TVC = $500, MC = $3 and MR = $3, the short-run result/s for the perfectly competitive firm will be:

• A) making a short-run loss of $500.
• B) breaking even, as MC = MR.
• C) shutting down and incurring a loss of $1000.
• D) making a loss of $1000 but continuing to operate.

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Definitions:

Transportation Costs

Expenses incurred by a company to move its goods or services from one location to another.

Equipment Cost

The total expense incurred from acquiring equipment including purchase price, transportation, installation, and any other costs to make the equipment operational.

Double-Declining-Balance Method

An accelerated depreciation technique that depreciates assets faster than traditional straight-line depreciation.

Straight-Line Depreciation

Method that allocates the depreciable cost of an asset in equal periodic amounts over its useful life