Which of the following rules should be followed by a supplier for profit maximization? Options: A . &nbspKeep producing until the total revenue is equal to total cost. B . &nbspproduce an additional unit of good if the price is greater than the marginal cost C . &nbspdo not produce an additional unit if its marginal cost is higher than the marginal cost of the previously produced units D . &nbspAlways produce an additional unit when the marginal revenue is greater than zero.

Which of the following rules should be followed by a supplier for profit maximiz

Question

Which of the following rules should be followed by a supplier for profit maximization?

Options:

A . Keep producing until the total revenue is equal to total cost.

B . produce an additional unit of good if the price is greater than the marginal cost

C . do not produce an additional unit if its marginal cost is higher than the marginal cost of the previously produced units

D . Always produce an additional unit when the marginal revenue is greater than zero.

Answer: Option B
:
B
If the price is greater than the marginal cost of the next unit, the firm should continue production as there is a profit on producing the additional unit.

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