Question

Which of the following statements best describes a by-product?

a. A product that usually produces a small amount of revenue when compared to the main product revenue.
b. A product created along with the main product whose sales value does not cover the cost of its production.
c. A product that has a greater value than the main product.
d. A product with a value that can easily and accurately be determined.

Answer 1

A by-product is best described as a secondary product that creates a smaller amount of revenue compared to the main product, and it is not the main focus of production and marginal revenue analysis.The right answer is A

Step-by-step explanation:

The statement that best describes a by-product is a. A product that usually produces a small amount of revenue when compared to the main product revenue. By-products are secondary products that are produced during the manufacturing process of a main product. By-products may have some value or utility, but their sales do not constitute the primary source of income for a business. They are often a result of the production process and are not the main purpose for the manufacturing activity. Considering the context of production and marginal revenue, the by-product is not typically the focus when firms analyze their marginal product and marginal revenue product, which deal with the revenue or output attributed to the main product and the last unit of input such as labor.