A proﬁt-maximizing ﬁrm will produce a level of output where:
A) average cost is equal to marginal revenue.
B) price is greater than marginal revenue.
C) marginal revenue is equal to marginal cost.
D) price is equal to average cost.

Question

Quizplus · Accepted Answer

A profit-maximizing firm will produce up to the point where marginal revenue (MR) is equal to marginal cost (MC), as this is where the last unit produced adds the most to profit without reducing it.

A Proﬁt-Maximizing ﬁRm Will Produce a Level of Output Where