The profit-maximizing level of output for a firm occurs at the point at which

Question

Quizplus · Accepted Answer

The profit-maximizing level of output for a firm occurs at the point where marginal revenue (MR) equals marginal cost (MC) because at that point, the additional revenue gained from producing one more unit is equal to the additional cost incurred in producing that unit. This results in maximum profit for the firm. Options A and D are not necessarily the profit-maximizing level of output, and option B only represents the shutdown point for the firm in the short run.

The Profit-Maximizing Level of Output for a Firm Occurs at the Point