A Given a Downward-Sloping Demand Curve and Positive Marginal Costs

question 40

Essay

A. Given a downward-sloping demand curve and positive marginal costs, profit-maximizing firms will always sell less output and at higher prices than will revenue-maximizing firms.
B. Profits will be maximized when marginal revenue equals marginal cost.
C. Total profit is the difference between total revenue and total cost and will always exceed zero at the profit-maximizing activity level.
D. Marginal cost must be less than average cost at the average cost minimizing output level.
E. The demand curve will be downward sloping if marginal revenue is less than price.

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