At the Profit-Maximizing Level of Output for a Perfectly Competitive

question 234

Multiple Choice

At the profit-maximizing level of output for a perfectly competitive firm, price equals marginal cost.Which of the following is also true?

• A)The difference between total revenue and total cost is the greatest.
• B)Total revenue equals total cost.
• C)Average revenue equals average total cost.
• D)Marginal profit equals marginal cost.

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Definitions:

Accounting Equation

The foundation of double-entry bookkeeping, stating that assets are equal to the sum of liabilities and owner's equity: Assets = Liabilities + Owner's Equity.

Owner's Equity

The residual interest in the assets of the entity after deducting liabilities, representing what the owners or shareholders own outright in the company.

Liabilities

Financial obligations a company owes to outside parties.

Assets

Resources owned by a business which are expected to provide future economic benefits, such as cash, inventory, property, and equipment.