Short-run profits are maximized at the rate of output where
A)Average total costs are minimized.
B)Total revenue is maximized.
C)Marginal revenue is zero.
D)Marginal revenue is equal to marginal cost.

Question

Quizplus · Accepted Answer

Short-run profits are maximized when marginal revenue is equal to marginal cost. This is because at this rate of output, each additional unit produced generates the same additional revenue as cost, maximizing the profit per unit. Therefore, choice D is the correct answer.

Short-Run Profits Are Maximized at the Rate of Output Where