A profit-maximizing firm in the short run will expand output
A)until marginal cost begins to rise.
B)until total revenue equals total cost.
C)as long as marginal revenue is less than marginal cost.
D)as long as marginal revenue is greater than marginal cost.

Question

Quizplus · Accepted Answer

A profit-maximizing firm will continue to produce additional units as long as the revenue from selling an additional unit (marginal revenue) is greater than the cost of producing that additional unit (marginal cost). This is because producing and selling that unit adds to the firm's profit.

A Profit-Maximizing Firm in the Short Run Will Expand Output