The Table Given Below Shows the Price Charged by a Firm

question 59

Multiple Choice

The table given below shows the price charged by a firm and the marginal cost incurred by it for the different levels of the output. Table 24.2
The firm described in Table 24.2:

• A)must be a monopoly firm.
• B)must be a perfectly competitive firm.
• C)cannot be a perfectly competitive firm.
• D)has no market power.
• E)cannot be a monopoly.

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Definitions:

Fixed Costs

Costs that do not change with the level of production or sales activities within a certain range or period of time, such as rent, salaries, and insurance.

Contribution Margin

The amount remaining from sales revenue after variable expenses are deducted, indicating how much contributes to covering fixed costs and generating profit.

Variable Cost

Expenses that change in proportion to the volume of output or sales, including items like labor and materials.

Option To Wait

A choice or right, but not the obligation, to delay a business decision or investment, recognizing the value of flexibility in decision-making under uncertain conditions.