At What Point Does a Firm Maximize Profit

question 181

Multiple Choice

At what point does a firm maximize profit?

• A) The point at which marginal cost equals marginal revenue
• B) The point at which the firm sells its product at the highest price
• C) The breakeven point plus the adjusted marginal cost
• D) The point at which marginal profits equal marginal revenue
• E) The point at which marginal cost equals marginal profits

---

Definitions:

Account

An accounting form used to record the increases and decreases in each financial statement item.

Stockholders' Equity

The portion of the capital of a company that belongs to the shareholders; it represents the residual assets of a company after debts and liabilities have been settled.

Debit Balance

The sum remaining in an account after all debts have been subtracted from the total credits, indicating an excess of debits over credits.

Credits

Accounting entries that increase liabilities or equity or decrease assets, reflecting the sources of funding or income.