If Colgate-Palmolive wants to maximize profit on its toothpaste, it should operate at the point where
A) total costs and total revenues are equal.
B) marginal revenue is at its highest level.
C) marginal revenue exceeds marginal cost.
D) marginal revenue equals marginal cost.
E) demand is most elastic.

Question

Quizplus · Accepted Answer

Colgate-Palmolive should operate at the point where marginal revenue (MR) equals marginal cost (MC). At this point, the company is producing the optimum output level that maximizes profit since they are earning an additional unit of revenue that is equal to the cost of producing that unit.

If Colgate-Palmolive Wants to Maximize Profit on Its Toothpaste, It