When Firms Think at the Margin and Make Incremental Adjustments

question 196

Multiple Choice

When firms think at the margin and make incremental adjustments to the level of production, they are naturally led to a level of production where:

• A)average variable cost exceeds marginal cost
• B)costs are minimised
• C)profit is maximised
• D)total cost is less than average revenue

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Definitions:

Business Owners

Entrepreneurs or individuals responsible for the strategic decisions, financial risks, and operational management of a company.

Lots Of Money

A colloquial term referring to a substantial amount of currency or financial resources.

Entrepreneurs

People who initiate, manage, and assume the risks of starting a new business venture.

Opportunity

A set of circumstances that makes it possible to do something, often used in the context of business to denote a chance for progress or profit.