Asked by
Jordan Limongelli
on Dec 12, 2024
Verified
If a firm in a competitive price-searcher market finds that its marginal revenue exceeds its marginal cost at the current rate of output, it should
A) raise the price of the product and expand its output.
B) raise the price of the product and reduce its output.
C) lower the price of the product and expand its output.
D) lower the price of the product and reduce its output.
Marginal Revenue
The additional revenue that a company receives from selling one more unit of a good or service.
Marginal Cost
The extra expense involved in making one more unit of a product or service.
Expand Output
The process of increasing the quantity of goods or services produced by a business or economy.
- Interpret the function of marginal revenue and marginal cost in profit enhancement for corporations that engage in setting their own prices.
Verified Answer
TC
Learning Objectives
- Interpret the function of marginal revenue and marginal cost in profit enhancement for corporations that engage in setting their own prices.