If the marginal profit of the next unit is negative, the firm should produce more output in order to generate greater profit.

Name: If the marginal profit of the next unit is negative, the firm should produce more output in order to generate greater profit.
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Question

Quizplus · Accepted Answer

If the marginal profit of the next unit is negative, producing more output would result in decreasing overall profit. The firm should produce fewer units and focus on higher profit items in order to increase overall profitability.

If the Marginal Profit of the Next Unit Is Negative