The result that a firm should produce where MC=MR except when the shutdown condition is met is based on the assumption that it is attempting to

Question

Quizplus · Accepted Answer

The condition of producing where MC=MR is based on the profit maximization objective of the firm. When a firm is trying to maximize its profit, it will produce at the point where the marginal cost and marginal revenue are equal. However, this condition does not apply when the shutdown condition is met, as it would be more beneficial for the firm to shut down rather than produce. Therefore, the answer is A, which is maximizing profit.

The Result That a Firm Should Produce Where MC=MR Except