If a firm is producing at a point at which marginal revenues are greater than marginal costs, it should decrease its level of production.

Question

Quizplus · Accepted Answer

If a firm is producing at a point where marginal revenue is greater than marginal cost, it means that the firm should continue to increase its production level until marginal revenue equals marginal cost, as this would maximize the firm's profits. Decreasing production level would result in underutilization of resources and a lower profit level.

If a Firm Is Producing at a Point at Which