If Colgate-Palmolive Wants to Maximize Profit on Its Toothpaste, It

question 20

Multiple Choice

If Colgate-Palmolive wants to maximize profit on its toothpaste, it should operate at the point where

• A) total costs and total revenues are equal.
• B) marginal revenue is at its highest level.
• C) marginal revenue exceeds marginal cost.
• D) marginal revenue equals marginal cost.
• E) demand is most elastic.

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Definitions:

Corporation

A legal entity owned by shareholders, with the characteristic of limited liability, and capable of owning assets, suing or being sued.

Charter

A charter is a legal document that establishes a corporation or municipality and defines its rights, privileges, and purposes.

Total Stockholders' Equity

The total value of a company's assets minus its liabilities, representing the equity stake of investors in the company.

Treasury Stock

Shares that were once outstanding but were bought back by the company and are held in its treasury.