Refer to the Following Table: the Optimal Level of Activity

question 61

Multiple Choice

Refer to the following table: The optimal level of activity is:

• A)2
• B)3
• C)4
• D)5
• E)There is no optimal level in this case because marginal benefit does not equal marginal cost at any of the activity levels.

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Definitions:

Business Entity Assumption

A concept of accounting that limits the economic data in the accounting system to data related directly to the activities of the business.

Economic Transactions

Acts of buying, selling, or trading goods, services, or financial assets in the economy.

Cost Principle

An accounting principle that states all goods and services purchased by a business must be recorded at their historical cost, not their current value.

Monetary Unit

A standard unit of value in which economic transactions are recorded and the primary currency used within an economy.