A firm will maximize profit at the level of output where ________.

Question

Quizplus · Accepted Answer

The profit-maximizing level of output for a firm is where its marginal revenue (the additional revenue brought in by selling one more unit) is equal to its marginal cost (the additional cost incurred by producing one more unit). At this level of output, the firm is producing efficiently, minimizing costs and maximizing profits. Options A, C, and D do not take into account the marginal analysis necessary for profit maximization.

A Firm Will Maximize Profit at the Level of Output