Question
When a firm is producing at the level of output that maximizes profit, which of the following is true?(1 point)
Responses
Marginal revenue is greater than marginal cost.
Marginal revenue is greater than marginal cost.
Marginal revenue is positive.
Marginal revenue is positive.
Marginal cost is negative.
Marginal cost is negative.
Marginal revenue is equal to marginal cost.
Responses
Marginal revenue is greater than marginal cost.
Marginal revenue is greater than marginal cost.
Marginal revenue is positive.
Marginal revenue is positive.
Marginal cost is negative.
Marginal cost is negative.
Marginal revenue is equal to marginal cost.
Answers
GPT-4o mini
When a firm is producing at the level of output that maximizes profit, the correct statement is:
**Marginal revenue is equal to marginal cost.**
At this point, the firm is maximizing its profits because producing one more unit would result in marginal costs exceeding marginal revenue, leading to a decrease in profit.
**Marginal revenue is equal to marginal cost.**
At this point, the firm is maximizing its profits because producing one more unit would result in marginal costs exceeding marginal revenue, leading to a decrease in profit.