Economics · Producer Equilibrium
A profit-maximizing producer is not at equilibrium when Marginal Cost (MC) is greater than Marginal Revenue (MR) because:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1total revenue is always declining at this level of output
- 2the additional cost of producing the last unit exceeds the additional revenue earned from it✓
- 3losses can be avoided by stopping production entirely
- 4total profit can be maximized by expanding output further
Correct answer
the additional cost of producing the last unit exceeds the additional revenue earned from it
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