Under the Total Revenue and Total Cost Approach to Profit

question 13

Multiple Choice

Under the total revenue and total cost approach to profit maximization,

• A)firms equate total variable cost to total revenue in order to maximize profit
• B)profit is maximized when fixed cost falls to zero
• C)firms choose the level of output at which total revenue is the greatest distance above total cost when the firm earns an economic profit
• D)firms choose the level of output at which the changes in revenue and cost both equal zero
• E)total revenue is maximized when profit is zero

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Definitions:

Japanese Manufacturers

Refers to companies based in Japan that are involved in the production of goods across various industries, known for innovation and quality.

Profit Margins

The percentage of revenue that remains as profit after all costs and expenses are subtracted from total sales.

Tariff

A tax imposed by a government on goods and services imported from other countries, affecting trade.

Voluntary Quota

A self-imposed limit on the quantity of goods a country exports or imports.