If marginal revenue and marginal cost are not equal, profit can be maximized by
A)increasing output if MR MC.
B)decreasing output if MC MR.
C)moving to the output where the slopes of TR and TC are equal.
D)All of the above are correct.

Question

If marginal revenue and marginal cost are not equal, profit can be maximized by
A)increasing output if MR > MC.
B)decreasing output if MC > MR.
C)moving to the output where the slopes of TR and TC are equal.
D)All of the above are correct.

Quizplus · Accepted Answer

Profit maximization occurs when marginal revenue (MR) equals marginal cost (MC). If MR > MC, increasing output will increase profit. If MC > MR, decreasing output will increase profit. Therefore, all options are correct as they describe actions to reach the profit-maximizing condition where MR = MC.

If Marginal Revenue and Marginal Cost Are Not Equal, Profit