Assertion (A): At the profit-maximising output, total profit is greatest.
Reason (R): At that output, the profit from the last unit (MR − MC) is greatest.

Both A and R are true, and R is the correct explanation of A.Correct answerYour answerBoth A and R are true, but R is not the correct explanation of A.Correct answerYour answerA is true, but R is false.Correct answerYour answerA is false, but R is true.Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer C

Correct answer: C

A is true by definition.
R is false: at the profit-maximising output, the last unit adds zero profit (MR = MC).

Concept: Total versus marginal profit
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsProducer's equilibrium: MC = MR

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Ten questions from Revenue & Producer's Equilibrium, at your own pace.

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Ten questions from Revenue & Producer's Equilibrium, at your own pace.

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Assertion (A): At the profit-maximising output, total profit is greatest.Reason (R): At that output, the profit from the last unit (MR − MC) is greatest.

Explanation

Assertion (A): At the profit-maximising output, total profit is greatest.
Reason (R): At that output, the profit from the last unit (MR − MC) is greatest.