Asked by Areanna Payne on Sep 23, 2024
Verified
Which of the following is FALSE?
A) Increase production if MR>MC
B) Produce where MR=MC
C) Average cost is total cost per unit of production
D) Produce where MR=AC
Marginal Revenue (MR)
The additional revenue that a firm receives from selling one more unit of a good or service.
Marginal Cost (MC)
The additional cost required to produce one additional unit of a product or service, a crucial factor in economic decision-making and pricing strategies.
Average Cost (AC)
The total cost of production divided by the quantity of output produced, representing the per unit cost.
- Identify and make calculations related to profit maximization strategies, including comparisons of marginal revenue to marginal cost.
Verified Answer
BS
BEHRUZBEK SAIDKULOVabout 8 hours ago
Final Answer :
D
Explanation :
The statement "Produce where MR=AC" is false, as the profit-maximizing target is where MR=MC. Average cost is the total cost per unit of production, and firms should increase production when marginal revenue exceeds marginal cost (MR>MC) to increase profits. So, the correct statement would be "Produce where MR=MC".
Learning Objectives
- Identify and make calculations related to profit maximization strategies, including comparisons of marginal revenue to marginal cost.