If a competitive firm continues to produce when marginal revenue is less than marginal cost, then each additional unit of output
A)maximizes profits or minimizes losses.
B)minimizes losses.
C)reduces total profit.
D)increases total profit.
E)increases both total costs and total revenue.

Question

Quizplus · Accepted Answer

When a competitive firm produces where marginal revenue is less than marginal cost, each additional unit of output adds more to costs than to revenue, thereby reducing total profit.

If a Competitive Firm Continues to Produce When Marginal Revenue