If marginal revenue is lower than marginal cost, you would want to a. Reduce production b....

Question

Question

If marginal revenue is lower than marginal cost, you would want to

a. Reduce production

b. Increase production

c. Hold the production constant

d. None of the above

Answer 1

Answer #1

a. reduce production

Profit is maximised when marginal revenue is equal to marginal cost.

Thus to maximise profits, marginal cost should be decreased which happens when production is reduced.

Answer 2

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