Figure 12-2 -Refer to Figure 12-2.What Happens If the Firm Produces More

question 38

Multiple Choice

Figure 12-2
-Refer to Figure 12-2.What happens if the firm produces more than Q4 units?

• A)Its profit increases.
• B)It makes a loss.
• C)Its total revenue is increasing faster than its total cost.
• D)It could make a profit or a loss depending on what happens to demand.

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Definitions:

Cash Payments

Outflows of cash from a company to settle debts, purchase goods or services, or make investments.

Cash Account

An account recording the amounts of cash received and paid out in transactions.

Credit

A financial term denoting the provision of money, goods, or services with the expectation of future payment.

Consuming Goods

The action of using up goods or products, thereby reducing inventory.