-This firm would:
A) minimize its loss by shutting down.
B) minimize its loss by producing the output where marginal cost equals marginal revenue.
C) maximize its profit by producing the output where marginal cost equals marginal revenue.
D) not enough information to answer the question.

Question

-This firm would:
A) minimize its loss by shutting down. 
B) minimize its loss by producing the output where marginal cost equals marginal revenue. 
C) maximize its profit by producing the output where marginal cost equals marginal revenue. 
D) not enough information to answer the question.

Quizplus · Accepted Answer

A firm minimizes its loss or maximizes its profit by producing at the output level where marginal cost (MC) equals marginal revenue (MR), assuming it covers its variable costs. This principle applies whether the firm is in a loss situation or a profit situation.

-This Firm Would