In Order to Maximize Profit, a Firm That Sells Its

question 20

Multiple Choice

In order to maximize profit, a firm that sells its output in two markets will allocate total output between the two markets so that:

• A) marginal revenue is equal in the two markets
• B) marginal revenue for the firm is equal to the sum of the marginal revenues
• C) marginal revenue for the firm is equal to the sum of the marginal costs
• D) both a and b
• E) none of the above

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Definitions:

Entrepreneurial Ability

Refers to the capacity to innovate, introduce new products or services, improve processes, and manage business ventures effectively.

Economic Profit

The difference in overall financial returns and total operational expenditures, including both specific and assumed costs.

Lower Production Costs

Lower production costs refer to a reduction in the expenses associated with creating a product or service, which can lead to increased profitability.

Economically Efficient

A situation in which resources are distributed in a manner that maximizes overall societal benefits.