Select one: a. The company is maximizing profit. b. Marginal cost is greater tha

ID: 1095818 • Letter: S

Question

Select one:

a. The company is maximizing profit.

b. Marginal cost is greater than marginal revenue, so it should cut production.

c. The company is minimizing loss.

d. Marginal revenue is greater than marginal cost, so the firm should expand production.

Refer to the above chart. At quantity level B: Select one: a. The company is maximizing profit. b. Marginal cost is greater than marginal revenue, so it should cut production. c. The company is minimizing loss. d. Marginal revenue is greater than marginal cost, so the firm should expand production.

Explanation / Answer

d. Marginal revenue is greater than marginal cost, so the firm should expand production.

Explanation:

At point B, MC is below the horizontal MR line. So MR>MC. Hence, form should produce more as revenue will increase more than cost, hence, profit will increase.

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Select one: a. The company is maximizing profit. b. Marginal cost is greater tha

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Explanation / Answer

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