Maximum Utility Is Achieved When

question 132

Multiple Choice

Maximum utility is achieved when

• A)Total revenue is the greatest.
• B)The price elasticity of demand is 1.0.
• C)Marginal utility is zero.
• D)Total utility equals marginal utility.

---

Definitions:

Returns to Scale

The rate at which output increases in response to proportional increases in all inputs or resources, reflecting the production efficiency of a firm.

Long-Run Average Total Cost

The per unit cost of production in the long run, where all inputs, including capital, are variable.

Slope

The measure of the steepness, incline, or grade of a line, often calculated as the ratio of the vertical change to the horizontal change.

Diseconomies of Scale

Occur when a company or business grows so large that the costs per unit increase.