Among the Reasons Firms Find It Profitable to Expand Output

question 78

Multiple Choice

Among the reasons firms find it profitable to expand output in the short run when the price level is rising faster than expected is that

• A)all firms' costs are contractually fixed
• B)prices for firms' output are rising with the price level
• C)firms are interested in minimizing cost per unit,not total profits
• D)all firms' costs are variable
• E)the quantity of resources available to the economy is fixed

---

Definitions:

Common Stock

A form of corporate equity ownership, a type of security representing an ownership interest in a corporation.

Sale Date

The specific date on which a sale transaction is recognized in the accounting records, marking when the ownership and risks of goods pass from the seller to the buyer.

Equity Method

An accounting technique used to record investments in associate companies, where the investment is initially recognized at cost and subsequently adjusted for the investor’s share of the investee’s profit or loss.

Investment Account

A financial account held at a brokerage or financial institution that contains securities, cash, and other holdings for investment purposes.