A firm in any market structure will maximize its profit or minimize its loss by operating where:
A) total revenue equals total cost.
B) total revenue equals marginal revenue.
C) marginal revenue equals marginal cost.
D) marginal revenue is greater than marginal cost.

Question

Quizplus · Accepted Answer

Firms maximize profit or minimize loss by producing the quantity of output at which marginal revenue equals marginal cost. This is because at this point, the cost of producing one more unit of output equals the revenue it generates, ensuring that profit is maximized (or loss minimized) by not producing units that cost more to produce than they earn.

A Firm in Any Market Structure Will Maximize Its Profit