As long as price is greater than average variable cost,a firm maximizes its profit by producing that quantity of output for which

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Profit maximization occurs at the quantity where marginal revenue equals marginal cost. As long as price is greater than average variable cost, producing more output will increase profit as the additional revenue from the extra unit sold will be greater than the additional cost of producing it. Thus, the firm will continue to produce up to the point where marginal revenue equals marginal cost.

As Long as Price Is Greater Than Average Variable Cost,a