If profits depend on both how much is produced (output) and the level of quality, then a profit-maximizing firm should choose the levels of output and quality at which
A. The marginal revenue of quality exceeds the marginal cost of quality by the largest amount.
B. The marginal revenue of output exceeds the marginal cost of output by the largest amount.
C. The difference between the addition to total revenue and the addition to total cost of the last units of output and quality is the greatest.
D. both a and b
E. none of the above
Answer: E
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