Question

A producer’s profits are maximized when marginal costs are _____. less than marginal revenue resulting in decreasing marginal returns equal to fixed costs minus variable costs equal to marginal revenue

Answer 1

Answer:

are equal to marginal revenue.

Explanation:

Marignal cost is the additional cost that incurred by producing one extra product.

Marginal revenue is the additional profit that producer obtain by selling one extra product.

When marginal cost and marginal revenue are equal, it indicates that producing additional product does not give additional revenue any longer. At this point, the profit that the producer gets could not go any higher.