Joe's Butcher Shop is producing where MR = MC; Joe's Butcher Shop must be
A) earning a zero economic profit.
B) incurring a loss.
C) maximizing profits.
D) maximizing revenue but not maximizing profits.

Question

Quizplus · Accepted Answer

When a firm is producing at the point where marginal revenue (MR) equals marginal cost (MC), it is maximizing its profits. This is a fundamental principle of microeconomics that applies to firms in various market structures. It does not necessarily mean the firm is earning a zero economic profit, incurring a loss, or maximizing revenue without maximizing profits.

Joe's Butcher Shop Is Producing Where MR = MC; Joe's