Question

In general, it is a bad move for a company to produce more of a good or service if, by doing so,a. marginal cost exceeds marginal revenueb. variable costs exceed fixed costsc. demand exceeds supplyd. fixed costs exceed marginal revenue

Answer 1

Answer:

The correct option here is A) marginal cost exceeds marginal revenue

Explanation:

When a company is producing more goods and services, it becomes a bad move because at this point company's marginal cost starts exceeding the marginal revenue , which means with each additional units a company is producing it is losing profit on that unit, so it is better for a company to produce less and try to find that level of output where its marginal cost and revenue are equal because at that level, company would be able to make optimal profits.