Which of the Following Are True of Comparing Marginal Revenue

question 166

Multiple Choice

Which of the following are true of comparing marginal revenue to marginal cost?
(i) it reveals the contribution of the last unit of production to total profit
(ii) it is helpful in making profit-maximising production decisions
(iii) it always reveals whether a firm is making an economic profit
(iv) it tells a firm whether its fixed costs are too high

• A)(i) and (ii) only
• B)(iii) only
• C)(ii) and (iii) only
• D)(i), (ii), (iii) and (iv)

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Definitions:

Growth Rate

The percentage increase in the size or value of something, such as an economy, company’s revenue, or population, over a specific period.

Discount Rate

The interest rate used to discount future cash flows to their present value.

Stock Value

The current price at which a share of a company's stock can be bought or sold. It is determined by the market and can fluctuate based on demand and supply.

Present Value

The today's worth of future monetary sum or continuous cash flows, considering a defined interest rate.