If the Marginal Cost and Marginal Revenue Curves Intersect at Two

question 64

Multiple Choice

If the marginal cost and marginal revenue curves intersect at two different points,then maximum profit occurs at

• A)the output level where the MC curve crosses the MR curve from below
• B)the output level where the MC curve crosses the MR curve from above
• C)both points
• D)an output level between the two points
• E)an output level beyond the second point

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Definitions:

Variable Overhead

Expenses related to the indirect costs of production that vary with the level of output, including items such as indirect labor and maintenance expenses.

Net Income

The total earnings of a company after subtracting all expenses and taxes from total revenue, indicating overall profitability.

Break-Even Units

The quantity of products a company must sell to cover its production costs, with no profit or loss.

Units Sold

The total quantity of a product that has been sold during a particular period, a key measure of business performance.