Table 14-11
Suppose that a firm in a competitive market faces the following prices and costs:
-Refer to Table 14-11. If the firm is producing 3 units of output, it should produce
A)more units of output because its marginal revenue is greater than its marginal cost.
B)fewer units of output because its marginal revenue is less than its marginal cost.
C)more units of output because its marginal revenue is less than its marginal cost.
D)fewer units of output because its marginal revenue is greater than its marginal cost.

Question

Table 14-11
Suppose that a firm in a competitive market faces the following prices and costs: 
-Refer to Table 14-11. If the firm is producing 3 units of output, it should produce
A)more units of output because its marginal revenue is greater than its marginal cost. 
B)fewer units of output because its marginal revenue is less than its marginal cost. 
C)more units of output because its marginal revenue is less than its marginal cost. 
D)fewer units of output because its marginal revenue is greater than its marginal cost.

Quizplus · Accepted Answer

If the firm's marginal revenue is greater than its marginal cost, it should produce more units to increase profit.

Table 14-11 Suppose That a Firm in a Competitive Market Faces the Faces