If a Firm Equates MR and MC, Then

question 101

Multiple Choice

If a firm equates MR and MC, then:

• A) TR is at a maximum, and TC is at a minimum.
• B) output is at a maximum.
• C) both TR and TC are at a maximum.
• D) profits are at a maximum or losses are at a minimum.

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Definitions:

Retail Method

An accounting method used in the retail industry to estimate inventory value, based on the ratio of the cost of goods to the retail price.

Estimated Inventory

An approximation of the amount of inventory a company has, often used when actual counts are not feasible, based on sales and receipts data.

Retail Method

An inventory valuation method used in the retail industry, estimating inventory cost by applying a cost to retail price ratio.

Estimated Cost

An approximation of the cost to produce a product, start a project, or execute a plan, often used in budgeting and planning.