When Marginal Revenue is greater than Marginal Cost you should produce _________ output to maximize profit.

When Marginal Revenue is greater than Marginal Cost you should produce _________ output to maximize profit. When Marginal Revenue is less than Marginal Cost you should produce _______ output to maximize profit.

Expert Solution

When marginal revenue is greater than marginal cost you should produce more output to maximise profit. When marginal revenue is less than marginal cost you should produce less output to maximise profit. As we know when marginal revenue is greater than marginal cost it means producing the extra unit is bringing more revenue and the cost of producing that unit is less than the revenue generated by that unit, on the other hand,when marginal revenue is less than the marginal cost it means producing the extra unit is not profitable as the cost of producing that unit is greater than the revenue generated by that unit.

Rahul Sunny answered 2 years ago

T/F If the marginal revenue is less than the marginal cost, a profit-maximizing price taker should increase its output.

13) T/F If the marginal revenue is less than the marginal cost, a profit-maximizing price taker should increase its output.14) T/F When a firm is operating in a price-taker market, marginal revenue is always less than the market price.15) T/F When an economist says a firm is earning zero economic profit, this implies that the firm will likely have to declare bankruptcy in the near future unless market conditions change.16) T/F In the year 2008, nearly three out of four...

a. If the marginal revenue is less than the marginal cost, what should a profit-maximizing company...

a. If the marginal revenue is less than the marginal cost, what should a profit-maximizing company do? b. In a perfectly competitive graph, how does one calculate the economic profit? c. What is the shutdown point in a perfectly competitive firm? ' d. Briefly, what is the difference between economies of scale and diseconomies of scale? Why is it important to the firm? e. Given the following total cost function TC(q) = 1000 + 13q. Find the fixed cost, variable...

For a monopolist: Price is greater than marginal revenue. Marginal revenue equals zero. Marginal cost equals...

For a monopolist: Price is greater than marginal revenue. Marginal revenue equals zero. Marginal cost equals zero. Average total cost equals marginal cost.

marginal revenue equals marginal cost to maximize total revenue

Firms maximize profit by setting marginal revenue (MR) equal to marginal cost (MC). Assuming that the...

Firms maximize profit by setting marginal revenue (MR) equal to marginal cost (MC). Assuming that the MR curve is downward sloping and the MC curve is upward sloping, explain why is it not profit maximizing for a firm to be operating at an output level where MC is not equal to MR?

Nonprofit, or not-for-profit, firms: Select one: a. minimize cost rather than maximize profit. b. maximize revenue...

Nonprofit, or not-for-profit, firms: Select one: a. minimize cost rather than maximize profit. b. maximize revenue instead of profit. c. pursue profit as their main goal despite their name. d. have no incentive to produce efficiently. e. often pursue goals other than profit maximization.

why is the level of output at which marginal revenue equals marginal cost the profit maximizing...

why is the level of output at which marginal revenue equals marginal cost the profit maximizing output?

Why is the level of output at which marginal revenue equals marginal cost the profit maximizing...

Why is the level of output at which marginal revenue equals marginal cost the profit maximizing output?

QUESTION 12 Assume that a firm's marginal revenue barely exceeds marginal cost. To maximize profit, teh...

QUESTION 12 Assume that a firm's marginal revenue barely exceeds marginal cost. To maximize profit, teh firm should: expand output. contract output. maintain output. there is insufficient information to answer the question. QUESTION 13 In the short run, a perfectly competitive firm will stay in business as long as: Price equals average revenue. marginal revenue is greater than marginal cost. price exceeds average variable cost. price is less than average variable cost. QUESTION 14 Suppose that price is below the...

If a profit-maximizing firm is producing an output level in which marginal revenue exceeds marginal cost,...

If a profit-maximizing firm is producing an output level in which marginal revenue exceeds marginal cost, should it produce more, less or the same? Why? What is the profit-maximizing quantity for any firm to produce?

Question