The Rate of Production That Maximizes the Positive Difference Between

question 41

Multiple Choice

The rate of production that maximizes the positive difference between total revenues and total costs is the

• A) profit-maximizing rate of production.
• B) rate of production at which marginal revenue equals marginal product.
• C) rate of production at which marginal revenue equals average revenue.
• D) rate of production at which average revenue equals average total cost.

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Definitions:

Transitivity

A principle that if one option is preferred over a second, and the second is preferred over a third, then the first option is preferred over the third.

Consumer Preferences

The subjective tastes, as expressed by the utility function, that guide consumer choices in the marketplace.

Nonsatiation

The economic assumption that consumers always prefer more of a good to less, holding everything else constant.

Completeness

In decision theory, a property that states every set of choices can be ranked in an order of preference.