The profit-maximizing level of output occurs where
A)TR=TC.
B)TR=MC.
C)MR=MC.
D)MR=TC.

Question

Quizplus · Accepted Answer

The profit-maximizing level of output occurs where MR=MC, which represents the point where additional produced unit incurs an additional cost that is equal to the additional revenue earned, leading to the highest level of profit. TR=TC defines the break-even point, while TR=MC does not account for profit maximization. MR=TC does not consider revenue maximization.

The Profit-Maximizing Level of Output Occurs Where