A Firm Maximizes Total Profit When

question 31

Multiple Choice

A firm maximizes total profit when

• A) Total costs exceed total revenue by the largest amount.
• B) Total revenues are maximized.
• C) Marginal costs are greater than marginal revenues.
• D) Total revenue exceeds total cost by the greatest amount.

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Definitions:

Note Payable

A written promise to pay a specific amount of money, usually with interest, at a future date.

Interest Incurred

The cost of borrowing money, represented as the amount charged by a lender to a borrower for the use of assets, typically expressed as an annual percentage of the principal.

Discounted Note

A promissory note or bond sold at a price lower than its face value, which will pay the face value at maturity.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditure to the correct period.