If a firm wished to maximize total revenues it should produce where
A)marginal cost is zero.
B)marginal revenue is zero.
C)marginal revenue is equal to marginal cost.
D)marginal revenue is equal to price.

Question

Quizplus · Accepted Answer

To maximize total revenues, a firm should produce up to the point where marginal revenue (MR) is zero. This is because, in economic theory, total revenue increases as long as MR is positive and starts to decrease when MR becomes negative. Producing where MR is zero means the firm has reached the point of maximum total revenue.

If a Firm Wished to Maximize Total Revenues It Should