Which of the Following Formulas Calculates the Profit-Maximising Price

question 70

Multiple Choice

Which of the following formulas calculates the profit-maximising price?

• A) Total variable cost + total fixed cost
• B) (Total variable cost + total fixed cost) / price elasticity of demand
• C) Variable cost × [elasticity / (elasticity + 1)]
• D) Total cost × [elasticity / (elasticity + 1)]

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Definitions:

IFRS

International Financial Reporting Standards, a set of global accounting standards for financial reporting.

Government Regulation

Laws and rules established by governmental bodies aimed at controlling or supervising activities within various sectors for the welfare of society.

Cash Flow Statement

A financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents.

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, investors, and regulatory authorities.