To Maximize Profit,a Price Taker Should Produce the Output Level

question 28

Multiple Choice

To maximize profit,a price taker should produce the output level where

• A) total cost is the lowest.
• B) variable cost is the lowest.
• C) total revenue is the highest.
• D) price equals marginal cost.
• E) marginal cost is the lowest.

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Definitions:

Video Game Rentals

A service that allows consumers to borrow video games for a limited period of time for a fee.

Pokemon Cards

Collectible cards based on the Pokémon franchise, used for playing the Pokémon Trading Card Game.

Production Possibilities Curve

A graphical representation showing the maximum combination of goods and services that can be produced with a fixed amount of resources.

Capacity

The maximum output level that a firm, industry, or economy can sustain under the current conditions.