If the Marginal Cost of Producing a Television Is Constant

question 80

Multiple Choice

If the marginal cost of producing a television is constant at $200,then a firm should produce this item

• A)only if the marginal benefit it receives is greater than $200 plus an acceptable profit margin.
• B)as long as the marginal benefit it receives is just equal to or greater than $200.
• C)as long as its marginal cost does not rise.
• D)until the marginal benefit it receives reaches zero.

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Definitions:

Inventory Control

A management system that oversees the ordering, storage, and use of components that a company will use in the production of the items it will sell as well as the finished products the company will sell.

Theft

An act of stealing; specifically, the illegal taking and removing of personal property with intent to deprive the rightful owner of it.

FIFO

"First In, First Out," an inventory valuation method where the first items purchased or produced are the first ones sold, impacting the value of remaining inventory.

Gross Profit

The financial measure obtained by subtracting the cost of goods sold from total sales revenue.