Answer:
Increase quantity to where AC = MC = D=AR=MR
Explanation:
A perfectly competitive market is where there are many firms in the industry producing homogeneous products. There is ease of entry and exit into and out of the market. They are price takers and earn normal profits in the long-run. In order to maximize profits, a firm in a perfectly competitive industry should produce an the quantity where its average cost is equal to marginal cost when AR = MR = D. In other words, when the AC and MC curves intersect with AR = MR = D curve.
<em><u>Please refer diagram</u></em>
The firm is currently producing at a point where AC > MC at quantity 1000. In order to reach AC = MC, the firm has to increase its quantity to Qe. As it increases quantity, although marginal cost increases, average cost falls because now fixed costs are spread over a larger quantity of output.
At Qe, the three curves intersect and is the point where this firm can maximize its revenue (Price = Pe). At a price higher than this, it would lose customers since there are many others producing the same product and customers can easily shift to another.
Answer:
False
Explanation:
Given that
Credit balance of income summary account = $6,800
Debit balance of Withdrawals account = $2,900
Since the credit balance of income summary denotes the net income for the particular period and the debit balance of the withdrawn amount reflects that it is to be shown in the retained earning statement
The journal entry would be
Income summary A/c Dr $6,800
To Retained earning $6,800
(Being the difference is credited to retained earning)
False because it doesnt invest the stocks