If a firm has idle plant capacity, then it should produce additional products even if the marginal cost of doing so exceeds marginal revenue.

Name: If a firm has idle plant capacity, then it should produce additional products even if the marginal cost of doing so exceeds marginal revenue.
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Question

Quizplus · Accepted Answer

Producing additional products when the marginal cost exceeds marginal revenue would lead to losses on those additional units, as the cost of producing them is higher than the revenue they would generate.

If a Firm Has Idle Plant Capacity, Then It Should