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:

Null Hypothesis

a statistical hypothesis that assumes no effect or no difference between phenomena or populations.

Level of Significance

A threshold in statistical analysis that measures the probability of rejecting a true null hypothesis; commonly set at values like 0.05 or 0.01.

Headaches

A common physical ailment characterized by pain in any region of the head, varying greatly in intensity, pattern, and cause.

Null Hypothesis

A default hypothesis that there is no significant difference or effect, typically to be tested against an alternative hypothesis.