CIMA BA1 · Chapter 4 · Question 7 of 9
A firm that aims to maximise sales revenue (with no profit constraint) will choose the level of output at which:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Marginal revenue equals zero
Explanation
Total revenue rises as long as marginal revenue is positive and falls once marginal revenue becomes negative. Revenue is therefore maximised where MR = 0. Profit maximisation occurs where MR = MC.
More Goals of organisations and stakeholders MCQs
- Q9Which of the following is a connected stakeholder of a company?
- Q1In the assessment of value for money in a not-for-profit organisation, 'effectiveness' refers to:
- Q2In financial and economic theory, the primary objective of a commercial company is usually assumed to be:
- Q3Which of the following is an example of the principal-agent problem?
- Q4Using Mendelow's power-interest matrix, a stakeholder group with high power and high interest in an organisation's strategy should be: