A firm will maximise its profit if it produces and sells the level of output where:
A) marginal revenue equals marginal cost
B) marginal revenue equals average cost
C) average revenue equals total cost
D) average revenue equals average cost

Question

Quizplus · Accepted Answer

A firm maximizes its profit by producing the level of output where marginal revenue equals marginal cost, as this is the point where the cost of producing an additional unit is exactly covered by the revenue it generates, ensuring maximum profitability.

A Firm Will Maximise Its Profit If It Produces and Sells