If the firm is producing at a quantity of output where marginal cost exceeds marginal revenue, then ________. each marginal unit adds profit by bringing in more revenue than its cost the excess profit would attract additional competition the firm should reduce production the firm's perceived demand will shift to the left
Added by Maria S.
Close
Step 1
If marginal cost (MC) is greater than marginal revenue (MR), it means that the cost of producing an additional unit is higher than the revenue generated by that unit. Show more…
Show all steps
Your feedback will help us improve your experience
Adi S and 80 other Calculus 1 / AB educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Key Concepts
Recommended Videos
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_
Majid B.
When a cost-minimizing firm is faced with an increase in the relative price of labour, it adjusts its factor usage so as to increase the marginal product of labour relative to the marginal product of capital. use more of both capital and labour per unit of output. increase the marginal product of capital relative to the marginal product of labour. use more labour per unit of output than before. maintain the previous usage of labour.
Andrew D.
If the marginal cost of production at Firm 1 is less than the marginal cost of production at Firm 2, but the overall costs of production are lower on average at Firm 2, then Firm 2 should produce additional output up to the point that its average costs are less than its marginal costs. Firm 1 should produce output up to the point that its marginal costs of production are equal to the marginal costs of Firm 2.
Jennifer S.
Recommended Textbooks
Calculus: Early Transcendentals
Thomas Calculus
Transcript
Watch the video solution with this free unlock.
EMAIL
PASSWORD