Free CIMAPRA17-BA1-1 Exam Braindumps (page: 33)

Page 33 of 118

If a firm wishes to maximize market share without incurring a loss, it should set its price where

  1. Marginal revenue is zero
  2. Marginal revenue equals marginal cost
  3. Price equals marginal revenue
  4. Total cost equals total revenue

Answer(s): D



A firm will maximize profits by producing at that level of output where

  1. average total cost is at a minimum
  2. average revenue is at a maximum
  3. the difference between total costs and total revenue is greatest
  4. the difference between average revenue and average variable cost is greatest

Answer(s): C



Which ONE of the following statements does NOT describe a position of profit maximization?

  1. MC=MR
  2. Price elasticity of demand is less than 1
  3. Point of greatest excess of total revenue over total costs
  4. Total cost curve has the same slope as the total revenue curve

Answer(s): B



A profit-maximizing firm will cut the product's price to increase profits if

  1. Demand is elastic
  2. Unit costs fall
  3. The demand curve shifts rightwards
  4. Marginal revenue is greater than marginal cost

Answer(s): D



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