If a firm's marginal revenue is below its marginal cost,an increase in production will usually
A)increase profits.
B)leave profits unchanged.
C)decrease profits.
D)increase marginal revenue.

Question

Quizplus · Accepted Answer

If marginal revenue is less than marginal cost, then producing more will lead to a decrease in profits as the cost of producing each additional unit will be more than the revenue generated from it. Therefore, the best choice is C, which states that an increase in production will usually decrease profits.

If a Firm's Marginal Revenue Is Below Its Marginal Cost,an