Kate is a professional opera singer who gives voice lessons. The vocal-music industry is competitive. Kate hires a business consultant to analyze her financial records. The consultant recommends that Kate give fewer voice lessons. The consultant must have concluded that Kate's

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The consultant recommends that Kate gives fewer voice lessons, which means that her marginal cost exceeds her marginal revenue. If Kate were to give fewer voice lessons, her total revenue would decrease but her total cost would decrease by even more, resulting in a higher profit margin. Therefore, the consultant's recommendation suggests that Kate is currently producing at a level where marginal cost exceeds marginal revenue, and reducing production would increase her profit.

Kate Is a Professional Opera Singer Who Gives Voice Lessons