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    Increase production past the point where MC=MR

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    What might cause a firm to want to increase production past the point where additional revenues offset additional costs (i.e., MC=MR)?

    a. The firm is enjoying the benefits of the learning curve
    b. Future production costs will be higher
    c. Managers are being rewarded on the basis of short-run profits
    d. The firm relies on direct growth incentives
    e. The firm wants to violate the rule of equating marginal revenue to marginal cost

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    Solution Preview

    d. The firm relies on direct growth incentives.

    A -- the learning curve ...

    Solution Summary

    This solution explains what might cause a firm to want to increase production past the point where MC=MR. The correct answer and explanation is provided.

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