Suppose that a firm is producing where 0

Name: Suppose that a firm is producing where 0 < MR < MC. If the firm produced one less unit of output, total revenue would ____ and total cost would ____.
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Question

Suppose that a firm is producing where 0 < MR < MC. If the firm produced one less unit of output, total revenue would ____ and total cost would ____.

Quizplus · Accepted Answer

If a firm is producing where Marginal Revenue (MR) is less than Marginal Cost (MC), reducing output by one unit would decrease total revenue (since MR is positive) and decrease total cost (since producing one less unit saves the cost of that unit, which is higher than the revenue it would bring in).

Suppose That a Firm Is Producing Where 0 < MR