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PRC-2 · Chapter 5 · Question 40 of 50

If the first derivative of a profit function is set to zero [dP/dx = 0], the resulting value of 'x' identifies a:

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Reveal answer & explanation

Correct answer: B) Stationary point (potentially a maximum or minimum profit).

Explanation

At a peak or trough, the slope of the curve is zero. Solving for dy/dx = 0 helps businesses find the optimal output level for profit maximization.

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