Question

How can producers maximize their profit? Check all that apply. They can work to increase their marginal cost. They can work to decrease their marginal cost. They can raise prices to increase marginal revenue. The can lower prices to decrease marginal revenue. They can keep marginal costs below marginal revenues. They can keep marginal revenues below marginal costs.

Answer 1

The laws of economics suggest that producers tend to maximize their profits when Marginal Revenue is equivalent to Marginal Costs. Otherwise, from all the statements above, the best possible answer is keep the marginal costs below marginal revenue.

Answer 2

ANSWER: For any producer to gain and maximize profit, they can lower the costs of production and revenues should be greater than the cost. So, the options would be

B) They can work to decrease their marginal cost.

C) They can raise prices to increase marginal revenue.

E) They can keep marginal costs below marginal revenues.

All these factors will either lead to increased revenue and lower costs or only keep the costs low thus maximizing profit.