If Profits Depend on Both How Much Is Produced Output)and

question 62

Multiple Choice

If profits depend on both how much is produced output) and the level of quality,then a profit-maximizing firm should choose the levels of output and quality at which

• A)The marginal revenue of output exceeds the marginal cost of output by the largest amount.
• B)The marginal revenue of quality exceeds the marginal cost of quality by the largest amount.
• C)The difference between the addition to total revenue and the addition to total cost of the last units of output and quality is the greatest.
• D)both a and b
• E)none of the above

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