For a Firm with More Than One Source of Output

question 23

Multiple Choice

For a firm with more than one source of output with differing cost structures, its ________ will be minimized when its ________ are equalized across sources.

• A) marginal production costs; production levels
• B) total production costs; production levels
• C) total production costs; marginal production costs
• D) marginal production costs; total production costs

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Definitions:

Operating Cycle

The total time period from the acquisition of resources for production to the collection of payments from the sale of the goods or services produced.

Sales

The total amount of goods or services sold by a company, also a critical indicator of a company's performance and market demand.

Cost of Goods Sold

Cost of Goods Sold is the total of all expenses directly related to the manufacturing or purchasing of products that a company sells during a period.

Days in Receivables

Days in Receivables, often referred to as Days Sales Outstanding (DSO), measures the average number of days it takes a company to collect payment after a sale has been made.