|Output||Marginal Revenue||Marginal Cost|
Refer to the above data. If the firm's minimum average variable cost is $10, the firm's profit-maximizing level of output would be
Marginal Revenue and Marginal Cost:
Marginal revenue and marginal cost are two aspects of a production decision that matter to firms. An additional unit of production is profitable only if the marginal revenue is higher than the marginal cost.
Answer and Explanation: 1
The answer is b).
An additional unit of output should be produced if the marginal revenue is higher than the marginal cost. For the first unit of...
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fromChapter 24 / Lesson 6
Learn the profit maximization definition, its importance, and explore the profit maximization theory. See how to calculate profit maximization with examples.