For any company operating in a marketplace,the firm attempts to maximize the value of the company's worth by setting the output where
A)costs are lowest.
B)P

Question

For any company operating in a marketplace,the firm attempts to maximize the value of the company's worth by setting the output where
A)costs are lowest.
B)P < AVC.
C)MR = MC.
D)AR = MC.

Quizplus · Accepted Answer

Maximizing the value of the company's output requires setting the level of output where marginal revenue (MR) equals marginal cost (MC). This is because at the output level where MR=MC, the firm can sell an additional unit of output at the same price as the cost of producing that unit, meaning the firm is earning the most profit possible at that level of output. Therefore, choice C is the best option for maximizing the value of the company's worth.

For Any Company Operating in a Marketplace,the Firm Attempts to Maximize