Profit is at a maximum where:
A) total revenue equals total cost.
B) total revenue is at a maximum.
C) marginal revenue is at a maximum.
D) marginal revenue equals marginal cost.

Question

Quizplus · Accepted Answer

Profit is maximized at the point where marginal revenue (the revenue from selling one additional unit of a good or service) equals marginal cost (the cost of producing one additional unit of a good or service). This is because producing beyond this point would add more to costs than to revenues, reducing profit, while producing less would mean missing out on potential profits from units that could have been produced at a lower cost than they would sell for.

Profit Is at a Maximum Where