If the marginal revenue from producing one more toaster is $3.50 and the marginal cost of producing that same toaster is $4.25, the firm is maximizing marginal profit.

Question

Quizplus · Accepted Answer

The firm is not maximizing marginal profit because the marginal cost of producing the toaster is higher than the marginal revenue, resulting in a decrease in profit if the firm produces one more toaster. To maximize profit, the firm should only produce to the point where marginal revenue equals marginal cost.

If the Marginal Revenue from Producing One More Toaster Is