In Perfect Competition,the Profit-Maximizing Volume Is the Quantity at Which

question 122

Multiple Choice

In perfect competition,the profit-maximizing volume is the quantity at which ________.

• A)marginal cost equals marginal revenue
• B)contribution margin equals fixed cost
• C)marginal revenue equals price
• D)price exceeds marginal cost

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Definitions:

Net Operating Income

The profit realized from a business's operations after subtracting operating expenses but before deducting taxes and interest.

Variable Costing

A cost accounting method that includes only variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs and treats fixed manufacturing overhead as a period expense.

Net Operating Income

The profit a company makes after deducting operating expenses but before interest and taxes from its total revenue.

Direct Labor Cost

The expense associated with employees who physically convert raw materials into the company's products; considered a variable cost.