A profit-maximizing firm that is operating in the short run will sell an additional unit of output as long as:

Question

Quizplus · Accepted Answer

A profit-maximizing firm will continue to produce and sell additional units of output as long as the marginal revenue from these additional units exceeds the marginal cost of producing them. Therefore, the firm will sell an additional unit of output as long as it adds more to revenue than it adds to cost, which is the case in choice C. Choices A and B are not necessarily true, as reducing per-unit costs or marginal costs may not result in an increase in revenue. Choice D may not be relevant in the short run, as the firm may not have additional plant capacity immediately available.

A Profit-Maximizing Firm That Is Operating in the Short Run