The Principle That a Firm Should Produce Up to the Point

question 138

Multiple Choice

The principle that a firm should produce up to the point where the marginal revenue from the sale of an extra unit of output is equal to the marginal cost of producing it is known as the

• A)output-maximizing rule.
• B)profit-maximizing rule.
• C)shut-down rule.
• D)break-even rule.

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Definitions:

Reward Power

The capacity to influence others' behavior by controlling access to desired resources or outcomes.

Referent Power

A form of influence and authority derived from the charisma and interpersonal relationships of the power-holder, rather than formal positions.

Coercive Power

Refers to the ability of a person or group to enforce obedience from others through threats, punishment, or sanctions.

Legitimate Power

Authority that is accepted and recognized as rightfully held by an individual or organization, often through a formal position or role.