When marginal cost is equal to marginal revenue, the firm should:
A) produce more to increase profits.
B) produce less to decrease total costs.
C) stop producing additional units.
D) provide discounts to encourage purchases.
E) intensify distribution to increase sales.

Question

Quizplus · Accepted Answer

When marginal cost equals marginal revenue, the firm is maximizing its profit and should not produce additional units, as doing so would decrease profit.

When Marginal Cost Is Equal to Marginal Revenue, the Firm