In order to maximize profits, the derivative of total revenue with respect to quantity must equal the derivative of total cost with respect to quantity.

Question

Quizplus · Accepted Answer

This is known as the profit maximization rule in economics, which states that a firm should continue to produce and sell units of a good or service until the marginal revenue (derivative of total revenue with respect to quantity) equals the marginal cost (derivative of total cost with respect to quantity). At this point, the firm is maximizing its profits.

In Order to Maximize Profits, the Derivative of Total Revenue