Assume a firm's marginal costs are increasing at its current level of output: If a firm's marginal revenue is less than the marginal cost of producing the last unit of output chosen by the firm, then:
Profits can be increased if the firm decreases output.
The firm is certainly earning an economic profit but not as much as it could be
Profits can be increased if the firm increases output.
The firm's economic profit is necessarily less than zero_