The Vertical Distance Between the Total Cost and the Total

question 243

Multiple Choice

The vertical distance between the total cost and the total variable cost curves differs by an amount that

• A)initially increases, but then decreases, as output increases.
• B)is constant as output changes.
• C)decreases as output increases.
• D)increases as output increases.

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Definitions:

Profit-Maximizing Firm

A company that operates with the primary goal of maximizing its profits by adjusting output and pricing.

Marginal Revenue Product

The increased earnings resulting from the utilization of one more unit of either labor or capital.

Wage

The price paid for the use or services of labor per unit of time.

Demand Schedule

A table that shows the quantity of a good or service that consumers are willing to buy at various prices.