If the Marginal Revenue for the Next Unit of Output

question 143

Multiple Choice

If the marginal revenue for the next unit of output produced is $50, but the marginal cost is $45, the profit-maximizing firm should

• A) hold production constant.
• B) decrease production.
• C) increase production.
• D) consider stopping production before more losses are incurred.

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Definitions:

Place Theory

A theory in hearing that suggests different areas of the inner ear's basilar membrane respond to different frequencies, contributing to our perception of pitch.

Basilar Membrane

A structure in the cochlea of the ear that plays a key role in the sense of hearing by vibrating in response to sound, thus stimulating hair cells to send nerve impulses to the brain.

Receptor Cells

Specialized cells in the body responsive to particular stimuli like light, sound, or chemicals.

Sound Waves

Vibrations that travel through the air or another medium and can be heard when they reach a person's or animal's ear.