The table given below shows the total revenue and total cost of producing a commodity. Table 8.1
In Table 8.1, marginal revenue exceeds marginal cost:
A)until the fifth unit of output.
B)until the sixth unit of output.
C)up to the seventh unit of output.
D)up to the eighth unit of output.
E)at all units of output.

Question

The table given below shows the total revenue and total cost of producing a commodity. Table 8.1
 In Table 8.1, marginal revenue exceeds marginal cost:
A)until the fifth unit of output. 
B)until the sixth unit of output. 
C)up to the seventh unit of output. 
D)up to the eighth unit of output. 
E)at all units of output.

Quizplus · Accepted Answer

Marginal revenue exceeds marginal cost up to the seventh unit of output, as the revenue from selling an additional unit of output is greater than the cost of producing that unit. Beyond the seventh unit, marginal cost exceeds marginal revenue, indicating that producing additional units would result in a decrease in profit. Therefore, producing up to the seventh unit would maximize profit.

The Table Given Below Shows the Total Revenue and Total