Profit Maximization Occurs When

question 121

Multiple Choice

Profit maximization occurs when:

• A) total costs equals average fixed revenue
• B) average variable costs are larger than average total costs
• C) total costs equal total variable costs
• D) marginal variable costs equal average revenues
• E) marginal revenue equals marginal cost

---

Definitions:

Fixed Costs

Fixed Costs are business expenses that remain unchanged regardless of the level of production or sales activity, such as rent, salaries, and insurance premiums.

Fixed Costs

Expenses that remain constant regardless of the amount of goods produced or sold, including lease payments, wage expenses, and insurance fees.

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life.