When a firm's total revenue is at the maximum , marginal revenue is
Answer Details
When a firm's total revenue is at the maximum, the marginal revenue is zero. This means that the last unit of output sold is generating no additional revenue for the firm. Marginal revenue is the change in total revenue that results from a one-unit increase in output, and when it is zero, it indicates that any further increase in output will not increase the firm's total revenue. In other words, the firm has reached the point of maximum profit where the cost of producing additional units of output would exceed the additional revenue generated from selling them. Therefore, to maximize profit, the firm should produce the quantity of output where marginal revenue equals marginal cost.