If a firm's marginal revenue is greater than its marginal cost,then:
A)each added unit of output will reduce profits.
B)the firm is maximizing profit.
C)more output will add more to revenue than to cost.
D)more output will add more to cost than to revenue.
E)less output will add more to revenue than to cost.

Question

Quizplus · Accepted Answer

When marginal revenue is greater than marginal cost, producing additional units will increase profit because each unit adds more to revenue than it does to cost.

If a Firm's Marginal Revenue Is Greater Than Its Marginal