The intersection of a firm's marginal revenue and marginal cost curves determines the level of output at which
A) total revenue is equal to variable cost.
B) total revenue is equal to fixed cost.
C) total revenue is equal to total cost.
D) profit is maximized.

Question

Quizplus · Accepted Answer

The intersection of marginal revenue and marginal cost determines the profit-maximizing level of output, as it is the point where the additional revenue from selling one more unit equals the additional cost of producing that unit.

The Intersection of a Firm's Marginal Revenue and Marginal Cost