Question

production processes that were designed or engineered don't usually produce U-shaped ATC curves. Because of this, it is not meaningful to say that the business enterprise produces a quantity where MC = MR; and, if this is true, then the neoclassical theory of the short-run supply curve is incoherent.A) TrueB) False.

Answer 1

Answer:

B) False.

Explanation:

False. No matter what the shape of ATC curve profit maximization will always occur where MC=MR. At any point below it MC will be lower than MR so increasing output is beneficial. At any point above it MC will be higher than MR so decreasing output will reduce losses