If ABC Printing produces 100 calendars, and the MR of the 100th is $5 and the MC is $3, then the firm is
A) maximizing profit
B) producing too many calendars
C) making a $200 profit
D) making a $200 loss
E) producing too few calendars

Question

Quizplus · Accepted Answer

When marginal revenue (MR) exceeds marginal cost (MC), it indicates that producing additional units will increase profit. Since the MR of the $100th calendar is $5, which is higher than the MC of $3, ABC Printing could increase its profit by producing more than 100 calendars, indicating it is producing too few calendars.

If ABC Printing Produces 100 Calendars, and the MR of the 100th