When Marginal Revenue Is Zero

question 17

Multiple Choice

When marginal revenue is zero,

• A)P < MR.
• B)P = MR.
• C)a small increase in price causes no change in total revenue.
• D)a small decrease in price causes no change in total revenue.
• E)both c and d

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Definitions:

Decision Tree

A graphical representation of choices and their potential outcomes, including chance event outcomes, resource costs, and utility.

Expected Value Criterion

A decision-making approach based on the weighted average of all possible outcomes, with each outcome's weight being its probability of occurrence.

Variable Cost

Costs that change in proportion to the level of activity or volume of production, such as materials and labor costs.

Setup Cost

The cost to prepare a machine or process for production.