If a Cost Object Such as a Product or Customer

question 10

Multiple Choice

If a cost object such as a product or customer has a positive red margin, then:

• A)its green margin will be positive.
• B)its green margin may be positive, negative, or zero.
• C)its green margin will be negative.
• D)its green margin will be zero.

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Definitions:

Profit-maximizing Firm

A company that adjusts its production and sales levels to achieve the highest possible profit based on its cost structure and market price.

MRP = MRC

An equality suggesting that the marginal revenue product (additional revenue from one more unit of an input) equals the marginal resource cost (cost of acquiring one additional unit of the input).

Resource Price

The cost associated with acquiring resources needed for production, such as labor, land, and capital.

Derived Demand

Demand for a good or service that arises from the demand for another good or service.