Candice's stand-up paddleboard company will earn profits producing and selling at any output level where the company's:
A)marginal cost curve is above its demand curve.
B)average cost curve is above its marginal revenue curve.
C)demand curve is above its average cost curve.
D)marginal revenue curve is below its average cost curve.

Question

Quizplus · Accepted Answer

In order for Candice's stand-up paddleboard company to earn profits, it needs to produce and sell at an output level where its demand curve is above its average cost curve. This means that the company is receiving a price for its products that is higher than the cost to produce them (on average). This will result in a positive profit margin.

Candice's Stand-Up Paddleboard Company Will Earn Profits Producing and Selling