Which of the Following Statements Is True

question 70

Multiple Choice

Which of the following statements is true?

• A)The more elastic the demand, the higher is the profit-maximizing markup.
• B)The more elastic the demand, the lower is the profit-maximizing markup.
• C)The higher the marginal cost, the lower the profit-maximizing price.
• D)The higher the average cost, the lower the profit-maximizing price.

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Definitions:

Production Departments

Sections within a manufacturing entity responsible for producing finished goods.

Activity-Based Costing

An accounting method that assigns costs to products or services based on the activities they require, aiming to provide more accurate product costing.

Production Departments

Production departments are specific areas within a manufacturing facility where the actual production of goods takes place, often characterized by specialized operations or tasks.

Cost Driver

A factor that influences or contributes to the expense of certain business operations and activities.