The change in total profit when a firm increases its output by one unit equals
A)total revenue minus total cost
B)total revenue minus marginal revenue
C)marginal revenue minus marginal cost
D)total revenue minus marginal cost
E)marginal revenue plus marginal cost

Question

Quizplus · Accepted Answer

The change in total profit when a firm increases its output by one unit is the difference between the additional revenue generated (marginal revenue) and the additional cost incurred (marginal cost). Therefore, the correct choice is C, which is the difference between marginal revenue and marginal cost. Option A (total revenue minus total cost), Option B (total revenue minus marginal revenue), Option D (total revenue minus marginal cost), and Option E (marginal revenue plus marginal cost) do not represent the change in total profit when output is increased by one unit, therefore they are incorrect.

The Change in Total Profit When a Firm Increases Its