Suppose a firm is producing a level of output such that MR

QUESTION
Q4) Suppose a firm is producing a level of output such that MR > MC, what should be firm do to maximize its profits?

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Correct

Solution:
If a firm is producing a level of output such that MR (Marginal Revenue) is greater than MC (Marginal Cost), then the firm can increase its profits by increasing its output. Therefore, the correct option is (d) The firm should increase output. By producing more output, the firm can sell more units and earn more revenue. As long as the marginal revenue from each additional unit sold is greater than the marginal cost of producing that unit, the firm can increase its profits.
Correct option is (d)

Chapter 4 Unit 3 questions