If the marginal revenue of the next unit a firm produces is $50 and its marginal cost is $35, a firm should:
A) reconsider past production decisions.
B) decrease production.
C) increase production.
D) hold production constant.

Question

Quizplus · Accepted Answer

The firm should increase production because the marginal revenue ($50) is greater than the marginal cost ($35), indicating that producing additional units will increase profit.

If the Marginal Revenue of the Next Unit a Firm