The Profit Maximization Point Is When

question 74

Multiple Choice

The profit maximization point is when

• A) the total possible sales effort has been achieved.
• B) the marginal costs of adding a salesperson are equal to the marginal profits generated by that salesperson.
• C) the marginal profits for a salesperson are maximized by assigning them to a certain territory.
• D) the incremental profits of a salesperson provide a return over and above the cost to employ him or her.
• E) the optimal account to salesperson ratio has been determined.

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Definitions:

Limited Supply

A condition where the availability of a particular good is restricted in the market, often leading to increased prices.

Production Efficiency

A state in which the economy or a production process can no longer produce additional amounts of a good without lowering the production level of another product.

Long-Run Equilibrium

A state in which all factors of production can be adjusted, market supply equals demand, and economic agents have no incentive to change their behavior, leading to a steady-state market condition.

Competitive Industry

An economic sector characterized by a large number of firms that compete with each other to sell similar products or services, leading to efficiency and innovation.