If a profit-maximizing firm is currently producing where MR = MC, it should
A) increase output so that marginal revenue is less than marginal cost.
B) decrease output so that marginal revenue will be greater than marginal cost and the firm's profit will increase.
C) not change because it is already maximizing profit.
D) exit the industry.

Question

Quizplus · Accepted Answer

When a profit-maximizing firm is producing at a level where marginal revenue (MR) equals marginal cost (MC), it is maximizing its profit. This is because producing more would add more to cost than to revenue, and producing less would mean losing out on potential profits where revenue exceeds cost.

If a Profit-Maximizing Firm Is Currently Producing Where MR =