Suppose a Firm Finds It Is Better Off Operating Than

question 163

Multiple Choice

Suppose a firm finds it is better off operating than shutting down in the short run.What is true at the quantity at which marginal cost equals marginal revenue?

• A)total cost equals total revenue
• B)average cost equals average revenue
• C)profit is maximized
• D)revenue is maximized
• E)cost is minimized

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Definitions:

Equivalent Units

A concept in process costing that converts partially completed units into a number of equivalent full units.

Direct Method

An approach used in cost accounting or cost allocation in which costs are directly assigned to cost objects, such as departments or products, without any allocation of indirect costs.

Service Department

A division within a company that supports other departments by providing internal services or assistance.

Computer Workstations

High-performance computers designed for technical or scientific applications.