If the marginal revenue from producing one more filing cabinet is $45.00 and the marginal cost of producing that cabinet is $40.00, then the firm is maximizing marginal profit.

Question

Quizplus · Accepted Answer

Marginal profit is calculated as Marginal Revenue - Marginal Cost. In this case, the marginal profit for producing one more filing cabinet would be $5.00 ($45.00 - $40.00). Since marginal profit is positive, the firm is maximizing its profit.

If the Marginal Revenue from Producing One More Filing Cabinet