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 profit 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 profit 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) but increase profit, because it would save the cost of producing that unit, which is higher than the revenue the unit would bring in.

Suppose That a Firm Is Producing Where 0 < MR