If a firm is producing an output level at which marginal revenue exceeds marginal cost, the firm will increase profits by reducing its output level.

Name: If a firm is producing an output level at which marginal revenue exceeds marginal cost, the firm will increase profits by reducing its output level.
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Question

Quizplus · Accepted Answer

If marginal revenue exceeds marginal cost, the firm can increase profits by producing more output, not by reducing it. Reducing output would only result in lower revenue and lower profits.

If a Firm Is Producing an Output Level at Which