A firm is maximizing its profits when:
A)average costs are at a minimum.
B)total revenue is at a maximum.
C)marginal revenue exceeds marginal cost by the maximum amount.
D)its profit per unit sold is at a maximum.
E)none of the above are necessarily maximum-profit points.

Question

Quizplus · Accepted Answer

A firm maximizes its profits where marginal cost equals marginal revenue, not necessarily at the points described in options A, B, C, or D. These conditions might not align with the maximum profit point due to the complexities of cost structures and revenue models.

A Firm Is Maximizing Its Profits When