If marginal revenue exceeds marginal cost, a price-taker firm should

A) expand output.
B) reduce output.
C) lower its price.
D) do both a and c.

Marginal Revenue

Marginal revenue is the additional income earned from selling one more unit of a good or service.

Marginal Cost

The change in total cost that arises when the quantity produced changes by one unit; essentially the cost of producing one additional unit of a good or service.

Price-Taker Firm

A firm that has no control over the market price and must accept the prevailing market price for its product.