Question

In a profit-maximising firm, equilibrium output is chosen so that ______.

Options

• Any other output gives higher profit

• The firm has no tendency to change its output

• Total revenue is minimum

• Total cost is maximum

Answer 1

In a profit-maximising firm, equilibrium output is chosen so that the firm has no tendency to change its output.

Explanation: 

At the profit-maximising level of output, the firm is in equilibrium because it has no incentive to increase or decrease output.