If a firm finds that its marginal revenue exceeds its marginal cost, then the maximum profit rules require the firm to:
A)increase its output in perfect, but not necessarily in imperfect competition.
B)increase its output in imperfect, but not necessarily in perfect competition.
C)increase its output in both perfect and imperfect competition.
D)decrease its output in both perfect and imperfect competition.
E)do none of the above.

Question

Quizplus · Accepted Answer

The maximum profit rule states that a firm should continue to increase its output as long as the marginal revenue (MR) exceeds the marginal cost (MC). This principle applies to both perfect and imperfect competition markets.

If a Firm Finds That Its Marginal Revenue Exceeds Its