Question

All firms, no matter the type of firm structure in which they are producing, make their production decisions based on the point where their: Group of answer choices

Answer 1

The answer is B.

Step-by-step explanation:

The profit maximisation point is the point where marginal revenue equals marginal cost(MR = MC). At this point, total revenue is maximized.

Marginal revenue is the change in total revenue when additional units is sold or made while marginal cost is the change in total cost when additional unit of output is made.

When MR > MC, the firm is not manufacturing or producing enough goods and when MC > MR, it means the firm is manufacturing or producing too much and it is making loss with each additional production.