Profit is maximized when which of the following conditions occurs?

Question

Quizplus · Accepted Answer

Profit is maximized when marginal revenue equals marginal cost. This is because if marginal revenue is greater than marginal cost, increasing production will add more to revenue than to costs, increasing profit. However, if marginal cost is greater than marginal revenue, producing one more unit will add more to cost than to revenue, decreasing profit. Therefore, profit is maximized at the point where marginal revenue equals marginal cost.

Profit Is Maximized When Which of the Following Conditions Occurs