When the marginal-cost curve lies below the marginal-revenue curve a. the firm cannot improve its profit since revenue is already greater than cost. b. marginal revenue is greater than marginal cost, and the firm should therefore increase production to increase profits. c. marginal revenue is greater than marginal cost, and the firm should therefore decrease production to increase profits. d. marginal revenue is less than marginal cost, and the firm should therefore decrease production to increase profits. e. it is not possible for this firm to increase profits since it is failing to operate at an efficient point.

When the marginal-cost curve lies below the marginal-revenue curve a. the firm cannot improve its profit since revenue is already greater than cost. b. marginal revenue is greater than marginal cost, and the firm should therefore increase production to increase profits. c. marginal revenue is greater than marginal cost, and the firm should therefore decrease production to increase profits. d. marginal revenue is less than marginal cost, and the firm should therefore decrease production to increase profits. e. it is not possible for this firm to increase profits since it is failing to operate at an efficient point.

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 2.4P

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QUESTION 8

When the marginal-cost curve lies below the marginal-revenue curve

the firm cannot improve its profit since revenue is already greater than cost.

marginal revenue is greater than marginal cost, and the firm should therefore increase production to increase profits.

marginal revenue is greater than marginal cost, and the firm should therefore decrease production to increase profits.

marginal revenue is less than marginal cost, and the firm should therefore decrease production to increase profits.

it is not possible for this firm to increase profits since it is failing to operate at an efficient point.

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