Profits are maximized at the output level where:
A)marginal revenue equals marginal cost.
B)price equals average total cost.
C)price is greater than marginal cost.
D)marginal cost equals average total cost.

Question

Quizplus · Accepted Answer

Profit is maximized when a firm produces at the output level where marginal revenue (MR) is equal to marginal cost (MC). This is because at this point, the additional revenue from producing one more unit is just enough to cover the additional cost of producing that one more unit, so the firm is not making any losses and not missing out on any potential profits.

Profits Are Maximized at the Output Level Where