Refer to Figure 22.3 At quantity level B
A) The company is maximizing profit.
B) Marginal cost is greater than marginal revenue, so it should cut production.
C) The company is minimizing loss.
D) Marginal revenue is greater than marginal cost, so the firm should expand production.

Question

Refer to Figure 22.3 At quantity level B
A) The company is maximizing profit. 
B) Marginal cost is greater than marginal revenue, so it should cut production. 
C) The company is minimizing loss. 
D) Marginal revenue is greater than marginal cost, so the firm should expand production.

Quizplus · Accepted Answer

At quantity level B, marginal revenue is greater than marginal cost, indicating that the firm should expand production to increase profits.

Refer to Figure 22.3 at Quantity Level B