Assume you graph the costs of granting credit against the amount of credit extended.The optimal credit amount is then determined by the point which:

Question

Quizplus · Accepted Answer

The optimal credit amount is the point that minimizes the total cost curve, as this would result in the lowest total cost associated with granting credit. Maximizing carrying costs or opportunity costs would result in a suboptimal credit amount and higher costs overall.

Assume You Graph the Costs of Granting Credit Against the Amount