Assuming price is greater than long-run average cost and that at higher output levels marginal revenue is less that marginal cost, the firm will maximize profit in the long run if:

Question

Quizplus · Accepted Answer

In order to maximize profit in the long run, the firm must produce the output level where marginal revenue equals marginal cost. This is because producing more than this output level would result in a decrease in profit, as marginal cost would exceed marginal revenue. Conversely, producing less than this output level would result in a lower level of profit, as there would be unexploited profit opportunities (i.e., marginal revenue would exceed marginal cost). Therefore, the correct answer is C, as it represents the output level where the firm would maximize profit in the long run.

Assuming Price Is Greater Than Long-Run Average Cost and That