If a producer selects an output level and price where marginal revenue is equal to marginal cost:
A) marginal profit will be at its maximum.
B) total revenue will be at a maximum.
C) profits will continue to grow beyond this break-even point.
D) profit will be maximized.
E) any increase in price will cause marginal revenue to go negative.

Question

Quizplus · Accepted Answer

If a producer selects an output level and price where marginal revenue is equal to marginal cost, they have reached the profit-maximizing level of output. At this point, the producer is earning the highest possible profit by producing the optimal number of units at the optimal price.

If a Producer Selects an Output Level and Price Where