Profit maximization occurs when marginal revenue equals .
A) marginal profit
B) marginal sale
C) marginal cost
D) none of these

Question

Quizplus · Accepted Answer

In order to maximize profits, a firm must produce at the point where marginal revenue equals marginal cost. This is because at this point, the additional revenue generated by producing an additional unit of output is equal to the additional cost incurred to produce it, resulting in maximum profit for the firm. Therefore, the answer is C) marginal cost.

Profit Maximization Occurs When Marginal Revenue Equals