Which of the following is true about the output level where marginal revenue equals marginal cost?
A)Economic profits are equal to zero.
B)The firm should increase its output.
C)The firm is maximizing profit.
D)The firm should reduce its output.

Question

Quizplus · Accepted Answer

This output level represents the point where the additional revenue earned from selling one more unit equals the additional cost incurred in producing that unit. At this level, the firm is neither earning economic profits nor incurring losses. Therefore, the firm is maximizing its profit at this output level.

Which of the Following Is True About the Output Level