The Figure Above Shows Some of a Firm's Cost Curves

question 130

Multiple Choice

The figure above shows some of a firm's cost curves and its marginal revenue curve.
-Suppose the price of a can was $5.10.In this case,to maximize its profit,the firm illustrated in the figure above would

• A) decrease its production and would make an economic profit.
• B) not change its production and would make zero economic profit.
• C) not change its production and would make an economic profit.
• D) decrease its production and would incur an economic loss.
• E) not change its production and would incur an economic loss.

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Definitions:

Deferred Tax Liability

A tax obligation that arises when taxable income is delayed or postponed to future periods, reflecting taxes that are expected to be paid in the future.

Accrual Method

An accounting method that records revenues and expenses when they are earned or incurred, regardless of when the cash is received or paid.

Installment Sales Method

The installment sales method is an accounting technique used to recognize revenue and income on sales made through installment payments over time.

Intraperiod Tax Allocation

The process of allocating income taxes within a single financial reporting period, dividing the total tax expense among different parts of the financial statements.