Profits are maximized where a. TR = TC. b. TR - TC = 0. c. the...

Profits are maximized where

	a.	TR = TC.
	b.	TR - TC = 0.
	c.	the slope of the total revenue curve exceeds the slope of the total cost curve by the largest margin.
	d.	total revenues exceed total cost by the largest amount possible.

Solutions

Expert Solution

So as we know

Total Revenue is basically product of Price and Output .

Total Cost = Fixed cost + Variable Cost

So as we know , Profit = Total Revenue - Total Cost . So firms either earn higher profits by maximizing the Total revenue or by minimizing the Total Cost . Because by maximizing Total revenues or by minimizing the total cost , the difference between TR and TC will exceed . Hence higher the difference , higher will be the amount of revenues .

Hence (D) part is a correct answer

Rahul Sunny answered 1 year ago

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