A Firm's Efficient Scale of Production Is the Output at Which

question 51

Multiple Choice

A firm's efficient scale of production is the output at which its

• A) marginal revenue is at a maximum.
• B) marginal revenue equals marginal cost.
• C) profit is maximised.
• D) average total cost is at a minimum.
• E) marginal cost is at a minimum.

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Definitions:

Cash Dividends

Payments made by a corporation to its shareholder members. It's the share of the company's profits, decided and managed by the board of directors, and paid out to shareholders.

Equity Sold

The process of selling ownership interest in a company in exchange for capital.

Net Capital Spending

The total expenditure on capital assets, minus any sales of existing assets.

Operating Cash Flow

Cash generated from a company's normal business operations, indicating the company's ability to generate sufficient positive cash flow to maintain and grow its operations.