Question

Grant thinks he has reached the point where he has maximized his profit. However, because this can be tricky to determine, he is not sure. He decides to test it by selling one more unit. If Grant is correct in his assumption, what should happen when he sells this additional unit?

Answer 1

Marginal cost will exceed marginal revenue

Explanation:

We know that a profit has been maximized when the marginal cost equals the marginal revenue.

In this case, Grant thinks he has maximizes his profit. If this is true, when he sells the additional unit his profit will not be maximized anymore and the marginal cost will exceed marginal revenue.