If a Firm Seeks to Maximize Total Revenue,it Should Produce

question 123

Multiple Choice

If a firm seeks to maximize total revenue,it should produce the quantity where:

• A) marginal revenue equals zero.
• B) elasticity of demand is less than one.
• C) elasticity of demand is greater than one.
• D) marginal revenue is maximized.

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Definitions:

Limited Resources

Refers to the finite amount of resources available for production of goods and services, including labor, capital, and natural resources.

Market Supply Curve

A graphical representation showing the relationship between the price of a good and the total output of that good supplied by all producers in the market.

Identical Firms

Refers to companies within the same industry that have similar methods of production, costs, and characteristics, making their products essentially indistinguishable.

Linear Marginal Cost

A situation where the cost of producing one additional unit of a product or service remains constant, represented graphically as a straight line.