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    Marginal Revenue, Marginal Cost , Maximum Profit Rule

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    If a firm finds that its MR exceeds its MC, then the Maximum Profit rules require the firm to:

    a) increase its output in perfect, but not necessarily imperfect competition

    b) increase its output in imperfect, but not necessarily in perfect competition.

    c) increase its output in both perfect and imperfect competition

    d) decrease its output in both perfect and imperfect competition

    e) do none of the above.

    © BrainMass Inc. brainmass.com December 24, 2021, 4:59 pm ad1c9bdddf
    https://brainmass.com/economics/perfect-competition/marginal-revenue-marginal-cost-maximum-profit-rule-20323

    SOLUTION This solution is FREE courtesy of BrainMass!

    Answer: c) increase its output in both perfect and imperfect competition.
    Maximum profit rule says that profit is maximized when MR =MC. This is true both for perfect and imperfect competition. Thus the firm should increase its output till MR=MC.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    © BrainMass Inc. brainmass.com December 24, 2021, 4:59 pm ad1c9bdddf>
    https://brainmass.com/economics/perfect-competition/marginal-revenue-marginal-cost-maximum-profit-rule-20323

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