\begin{tabular}{l} In the short run, if the marginal cost is less than the marginal revenue, \\ the firm should ___ output to__ its profit. \\ \hline OA) increase; raise \\ OB) not change; raise \\ OC) decrease; raise \end{tabular}
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In the short run, if a firm's marginal cost (MC) is less than its marginal revenue (MR), it implies that it is making a profit on each additional unit produced. By increasing output, the firm can maximize its profit because it generates more revenue than the cost of producing those additional units. So, the appropriate answer is to increase output to raise its profit. It's important to remember that this relationship holds true only in the short run. In the long run, market adjustments such as entry of new firms can affect this balance, leading to potential changes in marginal costs and revenues. Keeping an eye on these shifts helps firms make more strategic decisions!