At what point does a firm maximize profit?
A) The point at which marginal cost equals marginal revenue
B) The point at which the firm sells its product at the highest price
C) The breakeven point plus the adjusted marginal cost
D) The point at which marginal profits equal marginal revenue
E) The point at which marginal cost equals marginal profits

Question

Quizplus · Accepted Answer

A firm maximizes profit at the point where marginal cost equals marginal revenue. At this point, the firm is producing the optimal amount of output where the cost of producing an additional unit equals the revenue from selling that unit, resulting in maximum profit.

At What Point Does a Firm Maximize Profit