When marginal revenue equals marginal cost, the firm a. should increase the level of production to maximize its profit. b. may b
1 answer:
When marginal revenue is equal to the marginal cost, then the firm should increase the level of production to maximize its profit.
Marginal revenue simply means the increase in revenue that a company makes as a result of selling an additional output of good. Marginal cost is the cost that a company incurs for production of one extra unit of good.
It should be noted that when the marginal cost if a firm is more than the marginal revenue, it means that the firm is producing too much.
When the marginal revenue of the firm equals the marginal cost, then the firm should maximize its profit.
The correct option is A.
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Answer:
The company's revenue for the year is <u>$1,615,000</u>.
The correct option is <u>A. $1,615,000</u>.
Explanation:
Given:
Patterson Corporation began the year with retained earnings of $325,000. During the year, the company issued $500,000 of common stock, recorded expenses of $1,500,000, and paid dividends of $90,000.
If Patterson’s ending retained earnings was $350,000.
Now, to find the company's revenue for the year.
Opening Retained earnings = $325,000.
Common stock = $500,000.
Recorded expenses = $1,500,000.
Paid dividends = $90,000.
Closing Retained earnings = $350,000.
Now, to get the revenue of the company we put formula:
<u><em>Revenue = (Recorded expenses + paid dividends + closing Retained earnings) - opening Retained earnings</em></u>
Therefore, the company's revenue for the year is $1,615,000.
The correct option is A. $1,615,000.