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

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

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

Quizplus · Accepted Answer

When MR (Marginal Revenue) is greater than MC (Marginal Cost), producing one more unit increases total revenue more than it increases total cost, hence both total revenue and total cost increase.

Suppose That a Firm Is Producing Where MR > MC