The Golden Rule of Profit Maximization States That Any Firm

question 140

Multiple Choice

The golden rule of profit maximization states that any firm maximizes profit by producing where

• A)demand is unit elastic, and total revenue is greatest
• B)price equals average revenue
• C)price equals marginal revenue
• D)price equals marginal cost
• E)marginal revenue equals marginal cost

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Definitions:

Government Regulation

Government Regulation involves the imposition of rules by government authorities to control or manage market activities, with the aim of protecting public interest.

Creative Destruction

is a concept in economics where innovation radically transforms or destroys existing industries or ways of doing business, leading to new industries and opportunities.

Widespread Costs

Expenses that impact a large sector of the population or numerous aspects of an economy, often relating to public policies or externalities.

Benefits Accrue

The accumulation of advantages or positive results over time from an action or investment.