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alexira [117]
3 years ago
7

A profit-maximizing firm in a competitive market is able to sell its product for $7. At its current level of output, the firm's

average total cost is $10. The firm’s marginal cost curve crosses its marginal revenue curve at an output level of 9 units. The firm experiences a
a. profit of more than $27.
b. profit of exactly $27.
c. loss of more than $27.
d. loss of exactly $27.
Business
1 answer:
ser-zykov [4K]3 years ago
4 0

Answer:

d. loss of exactly $27.

Explanation:

Under a competitive firm, a profit-maximizing firm level of output can be find out by equating the marginal revenue with its marginal cost i.e

Marginal revenue = Marginal cost

As we know that

Average total cost = Total cost ÷ Quantity

$10 = Total cost ÷ 9

So, the total cost is

= $10 × 9

= $90

And,

Total revenue = Price  ×  quantity

= $7 × 9

= $63.

So,

Profit = Total revenue - total cost

= $63 - $90

= -$27

This amount comes in a negative which reflects that there is a loss of $27

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Explanation:

If the company applies the allowance method, it means that the account  

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Because the company has a credit balance in that account it's necessary to register an entry  that compensate the value as credit and reflect as debit the value estimated as 5% of account receivable.

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Dr Accounts Receivable                                    $ 107,000  

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Will the financial statements of a company always differ when different choices at the start of the accounting period are made r
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Answer:

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A. No. It depends on how a company handles the​ production-volume variance in the​ end-of-period financial statements. For​ example, if the adjusted​ allocation-rate approach is​ used, each​ denominator-level capacity concept will give the same financial statement numbers at​ year-end.

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