Under What Condition Are Profits Maximized

question 141

Multiple Choice

Under what condition are profits maximized?

• A) at the rate of output at which marginal revenue equals marginal cost
• B) at the output rate where marginal cost is greater than marginal revenue
• C) at the point at which the difference between total revenues and total costs is negative
• D) at the point at which the difference between price and quantity demanded is greatest

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Definitions:

Credit Sales

Sales made by a business where payment is delayed, allowing the customer to pay at a later date.

Selling Expenses

Costs incurred directly in the selling of products or services, including advertising, sales commissions, and retail store expenses.

General and Administrative Expenses

Costs related to the overall operations of a company that are not directly tied to a specific functional area.

Gross Profit

The revenue a corporation retains after removing the costs related to the creation and sale of its products or the provision of its services.