Question

A firm should continue producing until A. average costs are at a minimum. B. the average cost when another unit is produced equals the average revenue obtainable from selling the extra unit. C. the cost of producing the output equals the revenues obtainable from selling the output. D. the cost of increasing output by one more unit equals the revenues obtainable from selling the extra unit.

Answer 1

D. the cost of increasing output by one more unit equals the revenues obtainable from selling the extra unit.

Step-by-step explanation:

The firm should continue to producing till the increasing cost output by one extra unit equivalent to the revenue received from selling the additional unit as we know that the marginal cost is equivalent to marginal revenue. In the case when the marginal revenue is more than the marginal cost so it would rise the production but if the case is opposite so the output would reduce

Therefore the option D is correct