A microeconomic concept used in financial management is _____.
A) full utilization of data processing
B) setting marginal costs equal to marginal revenues
C) accrual basis of recognizing revenues and expenses
D) target capital structure

Question

Quizplus · Accepted Answer

Setting marginal costs equal to marginal revenues is a key microeconomic concept that is used in financial management. It helps businesses determine the optimal level of production or output by comparing the additional cost of producing one more unit (marginal cost) with the additional revenue earned from selling one more unit (marginal revenue). This analysis helps managers make pricing and production decisions that maximize profits. Options A, C, and D are not microeconomic concepts but rather specific methods or goals within financial management.

A Microeconomic Concept Used in Financial Management Is _____