In Order to Maximize Profits in the Short Run, a Firm

question 84

Multiple Choice

In order to maximize profits in the short run, a firm should produce where

• A)marginal revenue exceeds marginal cost by the greatest amount.
• B)marginal cost is minimized.
• C)average total cost is minimized.
• D)marginal cost equals marginal revenue.

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Definitions:

Times Interest Earned

A financial ratio that measures a company's ability to meet its debt obligations based on its earnings before interest and taxes.

Net Income

The total profit of a company after all expenses, taxes, and costs have been deducted from total revenue.

Income Tax Expense

The amount of money a company or individual owes to the government based on the taxable income for a given period.

Average Collection Period

The average number of days it takes for a business to collect its accounts receivable.