A firm is currently operating where the MC of the last unit produced = $64, and the MR of this unit = $70. What would you advise this firm to do?
A) Shut down.
B) Increase output.
C) Stay at current output.
D) Decrease output.

Question

Quizplus · Accepted Answer

Since MR ($70) is greater than MC ($64), producing an additional unit will generate a profit for the firm. Therefore, the firm should increase output.

A Firm Is Currently Operating Where the MC of the Last