For Managers Attempting to Maximize Operating Income for a Product

question 156

Multiple Choice

For managers attempting to maximize operating income for a product offering with a great deal of variety, product-mix decisions must usually take into account:

• A) more than one constraining resource
• B) just those products with the greatest contribution margin per constraining resource
• C) products that produce a profit above the full costs of the product
• D) how to maximize the selling price of all the products

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Definitions:

Total Output

Total output is the total quantity of goods or services produced by an economy, firm, or machine in a specific period.

Marginal-Cost Curve

A graphical representation showing how the cost of producing one additional unit of a good varies as production volume changes.

Marginal Cost

The variation in overall expenses that occurs with the production of an additional unit.

Total-Cost Curve

A graphical representation showing the total cost of producing different quantities of a good or service.