A Firm Will Maximise Its Profit If It Produces and Sells

question 166

Multiple Choice

A firm will maximise its profit if it produces and sells the level of output where:

• A) marginal revenue equals marginal cost
• B) marginal revenue equals average cost
• C) average revenue equals total cost
• D) average revenue equals average cost

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Definitions:

Cost-volume-profit Analysis

A financial analysis tool that helps in determining the effect of changes in costs and volume on a company's profit.

PERT

An acronym for Program Evaluation and Review Technique, a statistical tool used in project management, designed to analyze and represent the tasks involved in completing a given project.

Pareto Analysis

A method used in quality control and business to identify the few critical causes that account for most of an effect, enabling prioritization of effort.

Project Life Cycle

The series of phases that a project goes through from its initiation to its closure.