A firm maximizes profit by producing the output at which marginal cost equals

Name: A firm maximizes profit by producing the output at which marginal cost equals
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Question

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Maximizing profit occurs where marginal revenue equals marginal cost. This is because producing an additional unit of the good will increase revenue by the amount of marginal revenue, but also increase costs by the amount of marginal cost. Therefore, at the point where marginal revenue equals marginal cost, the firm is maximizing its profit.

A Firm Maximizes Profit by Producing the Output at Which