Which of the Following Statements Is True? I) When a Competitive

question 219

Multiple Choice

Which of the following statements is true? i) When a competitive firm sells an additional unit of output, its revenue increases by an amount less than the price.
Ii) When a monopoly firm sells an additional unit of output, its revenue increases by an amount less than the price.
Iii) Average revenue is the same as price for both competitive and monopoly firms.

• A) ii) only
• B) iii) only
• C) i) and ii) only
• D) ii) and iii) only

---

Definitions:

Net Working Capital Turnover

A measure of how effectively a company is using its working capital (current assets minus current liabilities) to generate sales.

Total Fixed Assets

The total value of all long-term, tangible assets held by a company for use in production but not for resale.

Long-Term Liabilities

Obligations due to be paid or settled beyond one year, including loans, bonds, lease obligations, and pension obligations.

Total Liabilities

The sum of all financial obligations a company owes to outside parties, including debts and other financial commitments.