A business will maximize profits at the output at which:
A)the excess of total cost over total revenue is greatest
B)total revenue and total cost are equal
C)price exceeds average cost by the largest amount
D)the difference between marginal revenue and price is at a maximum
E)the excess of total revenue over total cost is greatest

Question

Quizplus · Accepted Answer

A business maximizes profits where the difference between total revenue and total cost is the greatest. This is because profit is defined as total revenue minus total cost.

A Business Will Maximize Profits at the Output at Which