Suppose That the Slope of a Line Tangent to the Total

question 34

Multiple Choice

Suppose that the slope of a line tangent to the total cost curve at point X is steeper than the slope of a line tangent to the total benefit curve at point X,then:

• A) net benefit would be increased by reducing the amount of the activity.
• B) net benefit would be decreased by reducing the amount of the activity.
• C) net benefit would be increased by increasing the amount of the activity.
• D) net benefit is maximized.

---

Definitions:

EPS Growth Rate

A measure of the annualized rate of increase in earnings per share of a company over time.

Rate of Return

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

Current Stock Price

The price at which a stock is trading on the public market at any given time.