A Business Will Maximize Profits at the Output at Which

question 43

Multiple Choice

A business will maximize profits at the output at which:

• A)the excess of total cost over total revenue is greatest
• B)total revenue and total cost are equal
• C)price exceeds average cost by the largest amount
• D)the difference between marginal revenue and price is at a maximum
• E)the excess of total revenue over total cost is greatest

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Definitions:

World Price

The price at which goods are traded internationally, determining how much a product costs across different countries.

Free Trade

Free trade is the unrestricted exchange of goods and services between countries without tariffs, quotas, or other trade barriers.

Domestic Supply

Refers to the total amount of goods and services produced within a country's borders, available for domestic consumption and export.

Demand Schedules

Tables that show the relationship between the price of a good and the quantity demanded by consumers at those prices, typically illustrating the law of demand.