Which of the Following Is True

question 160

Multiple Choice

Which of the following is true?

• A) The objective of the firm is to maximize profits, by producing the amount that maximizes the difference between its total revenues and total cost.
• B) The objective of the firm is to maximize profits, by producing the amount that maximizes the difference between its average revenue and average total cost.
• C) The objective of the firm is to maximize profits, by producing the amount that maximizes the difference between its average revenue and average variable cost.
• D) The objective of the firm is to maximize profits, by producing the amount that maximizes the difference between its marginal revenue and marginal cost.

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Definitions:

Account Payable

The liability created by a purchase on account.

Solvency Analysis

An assessment of a company's ability to meet its long-term financial obligations.

Noncurrent Liabilities

Financial obligations of a company that are not due to be settled within one year, including long-term loans, bonds payable, and long-term lease obligations.

Current

In finance, "current" typically refers to assets and liabilities that are expected to be realized or settled within one year from the reporting date.