Which of the Following Is True at the Quantity at Which

question 101

Multiple Choice

Which of the following is true at the quantity at which average total cost equals average revenue?

• A)Economic profit is zero.
• B)Marginal cost equals marginal revenue.
• C)Economic profit is maximized.
• D)Total revenue is maximized.
• E)Total cost is minimized.

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Definitions:

Depreciable Cost

The total amount that can be depreciated over the life of an asset, typically the cost of an asset minus its salvage value.

Straight-Line Depreciation

A process for determining depreciation by uniformly distributing an asset's cost across its lifespan.

Residual Value

Residual value is the estimated value of an asset at the end of its useful life, reflecting what it could be sold for or its scrap value.

Double-Declining Balance

An accelerated method of depreciation that doubles the regular depreciation approach, resulting in larger depreciation expenses in the initial years of an asset's life.