Total profit is maximized
a. where the difference between total revenue and total cost is greatest.
b. at that output level where marginal revenue equals average cost.
c. where total revenue is at a maximum.
d. at the point where all variable costs are covered.
a
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The above figure shows a housing market with a rent ceiling equal to $1,000. In this figure, after taking account of the resources lost in search, what area is equal to the consumer surplus?
A) area A B) area B C) area C D) area D E) area E
Assume that price is greater than average variable cost. If a perfectly competitive firm is producing at an output where price is $114 and the marginal cost is $102, then the firm is probably producing more than its profit-maximizing quantity
Indicate whether the statement is true or false
If the capital—labor ratio is above the Golden Rule capital—labor ratio, then in the steady state,
A) capital per worker is above its maximum. B) output per worker is less than it would be at the Golden Rule capital—labor ratio. C) investment per worker exceeds output per worker. D) consumption per worker is not at its maximum.
The primary means of achieving long-run economic growth is:
A. increased capacity utilization, which is represented by a movement from a point inside the production possibilities curve to a point on the curve. B. movement from an undesirable point on a given production possibilities curve to a more desirable point on a given production possibilities curve. C. an emphasis on macroeconomic stabilization. D. represented by changes in a nation's productive capacity, represented by an outward shift of the production possibilities curve.