Suppose the Graph Below Gives a Solution to the Differential $\frac { \mathrm { dP } } { \mathrm { ds } }$

question 26

Multiple Choice

Suppose the graph below gives a solution to the differential equation $\frac { \mathrm { dP } } { \mathrm { ds } }$ = g(P) where P is the price of a product and s is the weekly sales. Which of the following statements is/are true?
(I) g(M) = 0
(II) $g ^ { \prime } ( M ) = 0$
(III) $g \left( \frac { \mathrm { M } } { 2 } \right) _ { = 0 }$
(IV) g( $\mathrm { P } _ { 0 }$ ) > 0

• A) I only
• B) IV only
• C) I, III, and IV
• D) I and IV
• E) I, II, and IV

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Definitions:

Variable Costing

An accounting method that includes only variable production costs (materials, labor, and overhead) in product costs, with fixed overhead costs being treated as period expenses.

Australian Accounting Standards

The principles and guidelines set by the Australian Accounting Standards Board that govern the reporting and financial practices of entities in Australia.

Net Profit

The amount of money left after all operating expenses, taxes, and interest have been deducted from total revenue.

Absorption Costing Profit

The profit calculated under absorption costing, which includes both variable and fixed manufacturing costs in the cost of a product.