Sam Sells Soybeans to a Broker in Chicago,Illinois

question 364

Multiple Choice

Sam sells soybeans to a broker in Chicago,Illinois.Because the market for soybeans is generally considered to be competitive,Sam maximizes his profit by choosing

• A) to produce the quantity at which average variable cost is minimized.
• B) to produce the quantity at which average fixed cost is minimized.
• C) to sell at a price where marginal cost is equal to average total cost.
• D) the quantity at which market price is equal to Sam's marginal cost of production.

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Definitions:

Work in Process Inventory

This inventory category includes goods that are partially completed in the production process but not yet ready for sale.

Total Cost

The sum of all expenses incurred in producing a product or providing a service.

Inventory Accounts

Accounts that represent the cost of goods and materials on hand that are available for sale or in the process of being made ready for sale.

Manufacturing Company

A company that produces finished goods from raw materials through the use of various machines, equipment, and processes.