Profit of a Firm Is Maximized When

question 36

Multiple Choice

Profit of a firm is maximized when:

• A)marginal revenue is maximum.
• B)marginal revenue is greater than marginal cost.
• C)marginal revenue is equal to marginal cost.
• D)marginal cost is minimum.
• E)marginal revenue is less than marginal cost.

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Definitions:

Expense

An expense represents a cost incurred by a business or individual in the process of generating revenue.

Depreciation

The accounting method of allocating the cost of a tangible or physical asset over its useful life, representing how much of the asset's value has been used up.

Equipment

Tangible property owned by a business that is used in its operations to generate income, having a useful life beyond one year.

Net Income

The net income of a company following the deduction of all expenses, taxes, and costs from its total revenues.