If a Firm Seeks to Maximize Profits, It Should Produce

question 28

Multiple Choice

If a firm seeks to maximize profits, it should produce the quantity where:

• A)marginal revenue equals zero.
• B)elasticity of demand is less than one.
• C)elasticity of demand is greater than one.
• D)marginal revenue is maximized.
• E)average total cost is minimized.

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Definitions:

Expected Returns

The mean of all the likely returns for an investment or portfolio over a given period, accounting for the risk of those returns.

Portfolio

An assortment of financial assets such as equities, bonds, commodities, money, and near-money assets, encompassing both closed-end funds and exchange-traded funds (ETFs).

Coefficient Of Correlation

A statistical measure that calculates the strength and direction of a linear relationship between two variables, ranging from -1 to 1.

Positively Correlated

A relationship between two variables in which they move in the same direction; as one increases, the other also increases.