Final answer:
Firms maximize profits when total revenue is maximized, the additional revenue from selling one more unit equals zero, selling additional units reduces profits, the revenue from the next unit sold equals the cost of producing it, and the total number of units sold is maximized. These conditions are not true when a firm is maximizing profits.
Step-by-step explanation:
When a firm is maximizing its profits, a few conditions are true:
- Total revenue is maximized: The firm is generating the highest possible revenue.
- Revenue gained from the next unit sold equals zero: The additional revenue from selling one more unit is zero. This is because the firm is already at its profit-maximizing level of output.
- Selling additional units will reduce profits: Producing and selling more units will actually decrease the firm's profits.
- Revenue gained from the next unit sold equals the cost of producing it: The additional revenue from selling one more unit is equal to the cost of producing it. This is another indication that the firm is at its optimal level of output.
- Total number of units sold is maximized: The firm is selling the maximum possible number of units.
- Not true when a firm is maximizing profits: This statement refers to conditions that are not true when a firm is maximizing its profits.