In the short run, a profit-maximizing price taker will expand output as long as the market price exceeds
A) average variable cost.
B) marginal cost.
C) average total cost.
D) average fixed cost.

Question

Quizplus · Accepted Answer

A profit-maximizing price taker will expand output as long as the market price exceeds marginal cost, as this ensures that each additional unit produced adds more to revenue than to cost.

In the Short Run, a Profit-Maximizing Price Taker Will Expand