Economic Profits Are Maximized at the Point at Which

question 352

Multiple Choice

Economic profits are maximized at the point at which

• A) marginal revenues equal marginal costs.
• B) accounting profit exceeds economic profit.
• C) total revenues are greater than total costs.
• D) accounting profits are equal to zero.

---

Definitions:

Output Expands

When the production of goods or services increases in response to market demand or other factors.

Fixed Cost

Costs that remain constant regardless of the level of production or sales, such as lease payments and salaries.

Quantity

The amount or number of a material or immaterial good considered as a unit or total.

Average Total Costs

The total cost of production (including both fixed and variable costs) divided by the number of units produced, representing the average expense per unit.