Which of the following is not possible when a firm is maximizing its profits?
A) MC = MR
B) AVC is at its minimum point
C) AFC

Question

Which of the following is not possible when a firm is maximizing its profits?
A) MC = MR
B) AVC is at its minimum point
C) AFC < AVC
D) MC = MR and MC is decreasing
E) MC = MR and MC is increasing

Quizplus · Accepted Answer

When a firm is maximizing its profits, the condition MC = MR must be met with MC either constant or increasing. If MC is decreasing, the firm can increase production to achieve a higher profit, indicating it is not at the maximum profit point.

Which of the Following Is Not Possible When a Firm