Questions: Question 11 (Multiple Choice Worth 4 points) (02.05 LC) Which of the following describes the quantity a business will produce to maximize its profits? The highest point on its supply curve The lowest point on its supply curve Where marginal cost meets marginal revenue Where marginal cost exceeds marginal revenue

The answer is: Where marginal cost meets marginal revenue.

Explanation for each option:

1. The highest point on its supply curve: This is incorrect. The highest point on the supply curve represents the maximum quantity a business is willing to supply at the highest price, but it does not necessarily indicate profit maximization.

2. The lowest point on its supply curve: This is incorrect. The lowest point on the supply curve represents the minimum quantity a business is willing to supply at the lowest price, but it does not indicate profit maximization either.

3. Where marginal cost meets marginal revenue: This is correct. Profit maximization occurs where marginal cost (MC) equals marginal revenue (MR). At this point, the cost of producing one more unit equals the revenue gained from selling that unit, ensuring that the business is not losing money on additional production.

4. Where marginal cost exceeds marginal revenue: This is incorrect. If marginal cost exceeds marginal revenue, the business is losing money on each additional unit produced, which would not maximize profits.