Maximizing the level of output for a given total cost of production
A)is equivalent to producing the profit-maximizing output level.
B)is equivalent to minimizing cost for a given level of output.
C)necessitates using only relatively low-priced inputs.
D)will maximize total revenue.

Question

Quizplus · Accepted Answer

Maximizing the level of output for a given total cost of production means achieving the highest possible output while keeping the cost of production at a given level. This is equivalent to minimizing the cost for a given level of output. By minimizing the cost, the firm can maximize its profits, given the revenue it receives from the sale of its output. Therefore, option B is the correct answer. Option A is incorrect because the profit-maximizing output level is achieved when marginal revenue equals marginal cost, which may not necessarily result in the maximum level of output for a given total cost of production. Option C is incorrect because there is no requirement that only low-priced inputs be used to maximize output. Option D is also incorrect because maximizing the level of output for a given total cost of production does not necessarily maximize total revenue.

Maximizing the Level of Output for a Given Total Cost