Mark owns a cattle ranch near Hugo,Oklahoma.Mark is currently producing beef at an output level where marginal revenue exceeds marginal cost.In order to maximize his profit,Mark should
A) not change his output.
B) decrease his output.
C) increase his output.
D) shut down his ranch.
E) probably change his output, but more information is needed to determine if he should increase, decrease, or not change it.

Question

Quizplus · Accepted Answer

Since Mark is currently producing beef at an output level where marginal revenue exceeds marginal cost, this implies that each additional unit he produces is generating more revenue than the cost of producing it. Therefore, to maximize his profits, Mark should increase his output until marginal revenue equals marginal cost.

Mark Owns a Cattle Ranch near Hugo,Oklahoma