If Profits Depend on Both How Much Is Produced (Output)

question 4

Multiple Choice

If profits depend on both how much is produced (output) and the level of quality, then a profit-maximizing firm should choose the levels of output and quality at which

• A) The marginal revenue of output exceeds the marginal cost of output by the largest amount.
• B) The marginal revenue of quality exceeds the marginal cost of quality by the largest amount.
• C) The difference between the addition to total revenue and the addition to total cost of the last units of output and quality is the greatest.
• D) both a and b
• E) none of the above

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Definitions:

Fragmentation Corollary

A principle in psychology that suggests an individual's self-concept can become divided and inconsistent under stress.

Instinctive Drives

The innate impulses that guide behavior without the need for conscious thought, often related to survival and reproduction.

Need to Self-Actualize

A psychological concept referring to the motivation to realize one's own maximum potential and capabilities.

Being Alive

The state or quality of having life, often discussed in the context of what constitutes meaningful or fulfilling existence.