Suppose a Company Increases Production from a Point Where Marginal

Multiple Choice

Suppose a company increases production from a point where marginal cost equals average total cost to a point where marginal revenue and marginal cost are equal. Is it a good idea for the company to do this? Why?

A) No; average total costs have increased which means the company is not minimizing losses.
B) Yes; because average variable costs are always less than average total costs.
C) No; because the marginal cost of producing the last unit is the same as the marginal revenue.
D) Yes; even though the previous level of output had minimized the average total cost, there was still profit to be earned by producing additional units.
E) No; the previous level of output was the most efficient because it had the lowest average total cost.