When a profit-maximizing firm increases output to Q = 50, its MR = $100 and MC = $124, meaning that total profit falls by $24, so the firm should contract production.

Name: When a profit-maximizing firm increases output to Q = 50, its MR = $100 and MC = $124, meaning that total profit falls by $24, so the firm should contract production.
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Question

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When marginal cost (MC) exceeds marginal revenue (MR), increasing output reduces profit, so the firm should reduce production to maximize profit.

When a Profit-Maximizing Firm Increases Output to Q = 50