The Profit-Maximizing Rule MR = MC Is

question 210

Multiple Choice

The profit-maximizing rule MR = MC is:

• A)followed by a monopoly but not by a perfectly competitive firm.
• B)followed by a perfectly competitive firm but not by a monopoly.
• C)followed by all types of firms.
• D)not followed by a monopoly because it would reduce economic profit to zero.

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Definitions:

Time Period Assumption

An accounting principle that assumes a business's complex and ongoing activities can be divided into shorter time periods, such as months, quarters, or years.

Prepaid Expense Account

An asset account that represents payments made in advance for goods or services to be received in the future.

Expenses

Outflows of resources or incurring of liabilities (or a combination of both) resulting from a company's activities intended to generate income.

Assets

Economic resources owned or controlled by a business or an individual that are expected to produce value.