Figure 8-4
-In Figure 8-4 at output level 2,
A)MR MC.
B)the slope of the total profit curve is negative.
C)there are negative profits.
D)marginal revenue is rising compared to output.

Question

Figure 8-4 
-In Figure 8-4 at output level 2,
A)MR > MC. 
B)the slope of the total profit curve is negative. 
C)there are negative profits. 
D)marginal revenue is rising compared to output.

Quizplus · Accepted Answer

At output level 2, the marginal cost is $15, while the marginal revenue is $20. Since MR > MC, the firm should increase production and sales to maximize profits.

Figure 8-4 -In Figure 8-4 at Output Level 2