Given the Accompanying Diagram, Which Level of Output Should the Entrepreneur

question 102

Multiple Choice

Given the accompanying diagram, which level of output should the entrepreneur choose to maximize profits?

• A)either X₁ or X₃ since the profit level will be the same
• B)X₃ since any increase in output will reduce profits
• C)X₁ since any decrease in output will reduce profits
• D)X₂ since at this level the difference between MR and MC is maximized

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Definitions:

Significant Change

An alteration that has a major impact on a company, industry, or market, often requiring adjustments to operations or strategies.

Consumers' Desire

The willingness or inclination of consumers to purchase goods and services based on their preferences and needs.

Allocation Of Resources

The process of distributing available resources among various competing needs or projects in an economy.

Five Fundamental Questions

The five fundamental questions refer to key economic questions any economy faces about what goods to produce, how to produce them, for whom to produce, how to accommodate change, and how to promote innovation.