If a firm finds that its marginal cost is greater than its price,it
A)Should reduce production.
B)Is maximizing its profit.
C)Should increase production.
D)Is maximizing its total revenue.

Question

Quizplus · Accepted Answer

If a firm's marginal cost is greater than its price, it means that it is incurring higher costs to produce an additional unit of output than the revenue it is receiving by selling that output. This indicates that the firm is not operating efficiently and is likely to be incurring losses. In such a scenario, the firm should reduce production to bring its marginal cost closer to the selling price and become profitable.

If a Firm Finds That Its Marginal Cost Is Greater