A profit-maximising firm should always increase the level of production if marginal cost exceeds marginal revenue.

Name: A profit-maximising firm should always increase the level of production if marginal cost exceeds marginal revenue.
Brand: Quizplus
Rating: 4.8 (53 reviews)

Question

Quizplus · Accepted Answer

A profit-maximising firm should increase the level of production if marginal revenue exceeds marginal cost, not the other way around. This is because the firm can sell additional units of output at a price higher than the marginal cost, increasing profits.

A Profit-Maximising Firm Should Always Increase the Level of Production