Which of the following statements regarding the profit maximising model is/are true?
i. The profit maximising model is limited because a firm's demand and marginal revenue are difficult to discern.
ii. The marginal revenue and marginal cost model is valid for all forms of market.
iii. Costing systems are not usually designed to measure the marginal changes in cost incurred as production and sales increase unit by unit.

Question

Quizplus · Accepted Answer

Statement i is true because determining a firm's demand and marginal revenue can be challenging in some situations. Statement iii is also true because traditional costing systems are not designed to measure marginal changes in cost as production and sales increase. Statement ii is false because the marginal revenue and marginal cost model assumes perfect competition, which may not be applicable to all forms of market.

Which of the Following Statements Regarding the Profit Maximising Model