If Profits Depend on Both How Much Is Produced (Output)and

question 48

Multiple Choice

If profits depend on both how much is produced (output) and on the level of advertising,then a profit-maximizing firm should choose the levels of output and advertising at which

• A)the marginal revenue of output equals the marginal cost of output.
• B)the addition to total revenue of the last unit of advertising equals the addition to total cost of the last unit of advertising.
• C)total revenue equals total cost for both output and advertising.
• D)both a and b
• E)both b and c

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Definitions:

Voucher System

A method of accounting in which a record is kept for each transaction, detailing the necessary approvals and documentation.

Source Documents

Original records that provide evidence of financial transactions, such as receipts, invoices, or bank statements.

Invoice

A document detailing a transaction between a buyer and seller, including the quantities, prices, terms, and conditions of sale.