Microeconomics Help A firm is currently operating where the MC of the last unit
ID: 1098792 • Letter: M
Question
Microeconomics HelpA firm is currently operating where the MC of the last unit produced is $84, and the MR of this unit is $70. What would you advise this firm to do? A) Stay at its current output
B) Decrease output
C) Shut down
D) Increase output
E) Decrease price
Microeconomics Help
A firm is currently operating where the MC of the last unit produced is $84, and the MR of this unit is $70. What would you advise this firm to do? A) Stay at its current output
B) Decrease output
C) Shut down
D) Increase output
E) Decrease price
Microeconomics Help
A firm is currently operating where the MC of the last unit produced is $84, and the MR of this unit is $70. What would you advise this firm to do? A) Stay at its current output
B) Decrease output
C) Shut down
D) Increase output
E) Decrease price
Microeconomics Help
A firm is currently operating where the MC of the last unit produced is $84, and the MR of this unit is $70. What would you advise this firm to do?
Explanation / Answer
B) Decrease output
For profit maximization, MC = MR. Here, MC > MR, by decreasing output the MC would decrease and the MR would decrease, and the firm would reach an output where MC = MR.