Asked by Kolya Ptashenko on Jul 07, 2024
Verified
A competitive firm will maximize profits at that output at which:
A) total revenue exceeds total cost by the greatest amount.
B) total revenue and total cost are equal.
C) price exceeds average total cost by the largest amount.
D) the difference between marginal revenue and price is at a maximum.
Profit-Maximizing
The method or approach of modifying production and pricing to secure the maximum achievable profit.
Total Revenue
The total amount of money a firm receives from sales of its products or services, calculated by multiplying the price per unit by the number of units sold.
Total Cost
The overall amount of money spent by a company on the production, operation, and distribution of its goods and services.
- Comprehend the notion and utilization of profit maximization strategies (MR=MC, P=MC) in diverse market environments.
Verified Answer
AA
Avery ArringtonJul 14, 2024
Final Answer :
A
Explanation :
A competitive firm maximizes profits where the difference between total revenue and total cost is the greatest. This is the point where the firm earns the highest possible profit.
Learning Objectives
- Comprehend the notion and utilization of profit maximization strategies (MR=MC, P=MC) in diverse market environments.