The Debt Created by a Business When It Makes a Purchase

question 131

Multiple Choice

The debt created by a business when it makes a purchase on account is referred to as an

• A) account payable
• B) account receivable
• C) asset
• D) expense payable

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Definitions:

Economies Of Scale

Cost advantages reaped by companies when production becomes efficient, as the scale of operation increases leading to a reduction in average costs.

Long-Run Average Cost

The average cost per unit of output when all inputs, including capital, are variable and optimized.

Marginal Revenue

The increase in revenue resulting from the sale of one additional unit of product.

Demand Schedule

A table that shows the quantity of a good or service demanded at different prices.