When a firm is maximizing profits it will necessarily be

Question

Quizplus · Accepted Answer

Maximizing profits involves finding the level of output where the marginal revenue (MR) equals the marginal cost (MC). At this level of output, the firm is maximizing the difference between total revenue (TR) and total cost (TC) which is equal to the profit. Therefore, choice B is the correct answer. Choice A is incorrect because maximizing profit per unit of output may not necessarily lead to maximum total profit. Similarly, choice C is incorrect as the firm could be producing at a level where the total cost is higher than necessary to maximize profit. Choice D is incorrect because maximizing total revenue without taking into account costs could lead to losses instead of profits.

When a Firm Is Maximizing Profits It Will Necessarily Be