When Price and Marginal Cost Are Equal for a Perfectly

question 124

Multiple Choice

When price and marginal cost are equal for a perfectly competitive firm, the firm is

• A) minimizing average total cost.
• B) maximizing total revenue.
• C) maximizing economic profit.
• D) earning negative economic profit.

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Definitions:

Consolidated SFP

Consolidated Statement of Financial Position; a financial statement that presents the total assets, liabilities, and equity of a parent company and its subsidiaries as one single entity.

Joint Venture

A business arrangement where two or more parties agree to pool their resources for the purpose of accomplishing a specific task or business activity.

Negative Goodwill

A financial situation where the price paid for an acquisition is less than the fair market value of its net tangible assets.

Note Payable

A written promise to pay a certain amount of money, often with interest, by a specific date, recognized as a liability in the borrower's financial statements.