In order to maximize profits in the short run, a firm should produce where
A)marginal revenue exceeds marginal cost by the greatest amount.
B)marginal cost is minimized.
C)average total cost is minimized.
D)marginal cost equals marginal revenue.

Question

Quizplus · Accepted Answer

Producing where marginal cost equals marginal revenue ensures that each additional unit produced generates an equal amount of revenue and costs, resulting in the highest possible profit in the short run. This is because producing any additional unit beyond this point would result in marginal cost exceeding marginal revenue, which would lower profits.

In Order to Maximize Profits in the Short Run, a Firm