If Price Is Greater Than Marginal Cost,a Perfectly Competitive Firm

question 96

Multiple Choice

If price is greater than marginal cost,a perfectly competitive firm should increase output because

• A)Marginal costs are increasing.
• B)Additional units of output will add to the firm's profits (or reduce losses).
• C)The price it receives for its product is increasing.
• D)Total revenues would increase.

Differentiate between process costing and job-order costing based on the types of products manufactured.

Grasp how the entire manufacturing costs flow through sequential manufacturing systems using process costing.

Analyze the computation of equivalent units for materials and conversion costs in various costing methods.

Understand the basic steps in process costing including the calculation of equivalent units of production.

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Definitions:

Marginal Utility

The additional satisfaction or benefit received from consuming one more unit of a good or service.

Perfect Substitutes

Items or services that can replace each other without any decrease in value or enjoyment for the user.

Utility per Dollar

A metric assessing the amount of utility or satisfaction a consumer receives per dollar spent on a good or service.

ADH

Antidiuretic Hormone, a hormone that helps to control the balance of water in the body by affecting the kidneys.