To Maximize Profit, the Firm Should Set Output at the Level

question 33

Multiple Choice

To maximize profit, the firm should set output at the level where:

• A) the average cost per unit is minimized.
• B) average revenue just equals average cost.
• C) marginal cost equals zero.
• D) marginal revenue is equal to marginal cost.
• E) marginal revenue equals zero.

---

Definitions:

Per Unit

This term describes the cost, price, or some other financial metric on a single-item basis.

Variable Costing

An accounting method that only incorporates variable costs (costs that change with production levels) in product costing and decision-making.

Production Increase

Represents the rise in the amount of goods and services produced by a company or economy, often aiming for higher efficiency and profitability.

Sales Level

The total volume or quantity of sales achieved by a business within a specific period.