In Marginal Analysis, the Most Profitable Price Is the Price

question 127

Multiple Choice

In marginal analysis, the most profitable price is the price at which:

• A) Profit is based on competitive pricing.
• B) Total revenue and total cost are equal.
• C) The difference between total revenue and total cost is greatest.
• D) Total profit and total cost are equal.
• E) None of these is a good answer.

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Definitions:

Equilibrium Outcome

The state in which market supply and demand balance each other, and, as a result, prices become stable.

Collusive Agreements

Arrangements between firms or countries to limit competition, set prices, or regulate market entry, often considered illegal or anti-competitive in many jurisdictions.

Prisoner's Dilemma

A situation in game theory where two individuals acting in their own self-interest do not produce the optimal outcome for either party.