At the production level that maximizes a firm’s profit
MATHEMATICS · Single correct · AP · Calculus AB · Analytical Applications of Differentiation · Analytical Applications of Differentiation
Problem
At the production level that maximizes a firm’s profit, which of the following must be true?
(a) Average revenue equals average cost, and marginal profit is zero.
(b) Marginal revenue equals zero, so total revenue is maximal.
(c) Marginal revenue equals marginal cost, and marginal profit is zero.
(d) Marginal cost is less than marginal revenue, so profit can no longer increase.