If a Firm Seeks to Maximize Total Revenue, It Should

question 15

Multiple Choice

If a firm seeks to maximize total revenue, 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:

Debts Owed

Amounts of money that are required to be repaid by an individual or organization to creditors.

Drawing Account

A specific account used to record amounts withdrawn by the owner(s) of a business for personal use.

Withdrawals

Amounts taken from a business by its owner(s) for personal use.

Expenses

Costs incurred by a business in the process of earning revenue.