To maximize total profit, managers want to produce the quantity in which marginal cost _________ marginal benefit.

Question

Quizplus · Accepted Answer

When marginal cost is equal to marginal benefit, the firm produces at the optimal level of output where total profit is maximized. At this level, the last unit produced adds as much to total revenue as it does to total cost. Therefore, producing more would decrease profit, and producing less would also decrease profit.

To Maximize Total Profit, Managers Want to Produce the Quantity