Economics Exercise 1. 1) For a profit-maximizing firm, there is a difference between the short run and the long run. In both situations, the company wants to maximize profit: P = TR -- TC (Skaggs, 2010). In the short run, such a firm should increase its output so long as...

Production therefore is expanded only to the point where MR=MC, because after that point the profit begins to shrink. The major difference is that in the long-run, if the firm is struggling, it may produce even if MR