Question

Under the condition of profit maximisation, MR must be equal to ______

Options

• AR

• MC

• AC

• TC

Answer 1

Under the condition of profit maximisation, MR must be equal to MC.

Explanation:

When the Marginal Revenue (MR) equals the Marginal Cost (MC) and the marginal cost curve cuts the marginal revenue curve from below, the producer is said to be in equilibrium.