The intersection of a firm’s marginal-revenue and marginal-cost curves determines the level of output such that which of the following is the case?

Question

Answer

Profit is maximized where total revenue is equal to variable cost.

Answer

none of the above

Answer

Profit is maximized where the difference between total revenue and total cost is the largest.

Answer

Profit is maximized where total revenue is equal to total cost.

Answer

Profit is maximized where the difference between marginal revenue and marginal cost is the largest.

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