A proﬁt-maximizing ﬁrm will increase its output if _____.
A) the demand for a substitute good increases
B) its revenues increase as it expands to wider markets
C) the government imposes a tariff on a raw material that it imports
D) labour unions force the management to increase wages

Question

Quizplus · Accepted Answer

A firm will increase its output if its revenues increase as it expands to wider markets because this indicates that the additional output can be sold at a profitable price, aligning with the goal of maximizing profits.

A Proﬁt-Maximizing ﬁRm Will Increase Its Output If _____