In the Short Run, a Profit-Maximising Firm's Decision to Produce

question 32

Multiple Choice

In the short run, a profit-maximising firm's decision to produce should be guided by whether

• A)it makes a profit.
• B)its marginal profit is maximised.
• C)its total revenue exceeds its fixed cost.
• D)its total revenue covers its variable cost.

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Definitions:

Scheduled Payments

Predetermined payments made at regular intervals, such as monthly or annually, often related to a loan or mortgage.

Rate of Return

The gain or loss of an investment over a specified period, expressed as a percentage of the investment’s initial cost.

Compounded Monthly

Refers to the process of adding interest to the principal sum of a loan or deposit on a monthly basis, where the added interest also earns interest from then on.

Savings Plans

Financial programs that allow individuals to set aside money for future use, often with tax advantages or interest benefits.