Question

A firm will maximize profit by producing that level of output at which?A. the additional revenue from the last unit sold exceeds the additional cost of the last unit by the largest amount.B. the additional revenue from the last unit sold equals the additional cost of the last unit.C. total revenue exceeds total cost by the largest amountD. total revenue equals total cost.E. both b and c.

Answer 1

Answer: The correct answer is "E. both b and c.".

Explanation:  A firm will maximize profit by producing that level of output at which "B. the additional revenue from the last unit sold equals the additional cost of the last unit." (to the point where Marginal Income = Marginal cost). And the "C. total revenue exceeds total cost by the largest amount".