In the Short Run, a Profit-Maximizing Firm's Decision to Produce

question 211

Multiple Choice

In the short run, a profit-maximizing firm's decision to produce should be guided by whether

• A)it makes a profit.
• B)its marginal profit is maximized.
• C)its total revenue exceeds its fixed cost.
• D)its total revenue covers its variable cost.

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Definitions:

Government Grant

financial awards given by governmental bodies to organizations, institutions, or individuals for specific purposes, usually without the expectation of repayment.

Quasi-Endowment Funds

Funds set aside by an organization, often a nonprofit or educational institution, to function like an endowment but which can be accessed under certain conditions, as determined by its governing body.

Operating Reserves

Financial assets set aside by an organization to cover unexpected shortfalls or emergencies, ensuring financial stability and operational continuity.

Permanently Restricted Endowment

A type of endowment fund that a donor restricts in perpetuity; the principal cannot be spent, but the investment earnings can be used for designated purposes.