A firm maximizes its total profits when ____________
A. total revenue equals total cost B. total cost exceeds total revenue by the greatest amount C. total revenue exceeds total cost by the greatest amount D. it is at the break-even point
Correct Answer: C
Explanation
Using the total cost - total revenue approach to profit maximization, the profit is maximized when the total revenue exceeds total cost by the greatest amount. For the managerial approach. profit is maximized when the \(\mathrm{MC}=\mathrm{MR}\)
