Which of the following is TRUE? A) Profit-maximizing behavior occurs only in perfectly competitive markets. B) Additional units of a good should be produced as long as MR MC.

Question

Which of the following is TRUE?
A) Profit-maximizing behavior occurs only in perfectly competitive markets.
B) Additional units of a good should be produced as long as MR < MC.
C) The profit-maximizing solution occurs where MR = MC.
D) The profit-maximizing solution occurs where MR > MC.

Quizplus · Accepted Answer

The profit-maximizing solution for a firm occurs where marginal revenue (MR) equals marginal cost (MC). This is the point where producing one more unit would not increase profit, as the cost of producing that unit equals the revenue it generates.

Which of the Following Is TRUE