The point of maximum profit for a business firm is where:
A) P = AC.
B) TR = TC.
C) MR = AR.
D) MR = MC.
E) TR = MR.

Question

Quizplus · Accepted Answer

The point of maximum profit for a business firm is where MR (Marginal Revenue) = MC (Marginal Cost). This is because at this point the additional cost incurred by producing one more unit is equal to the additional revenue earned from selling that unit. Thus, any deviation from this point would lead to either lower profits (if producing more than the point) or losses (if producing less than the point).

The Point of Maximum Profit for a Business Firm Is