Question 34
MediumOriginal questionBy the MR–MC approach, the two conditions of producer's equilibrium are
Show the answer and explanation
CorrectNot quiteAnswer A
Correct answer: A
Explanation
While MR > MC, an extra unit adds to profit; while MR < MC, it subtracts. Profit peaks where they are equal.
MC must also be rising there, or the next units would add profit again.
- Concept
- Conditions of producer's equilibrium
- Typical timeTypical
- 70 s
- Your timeYours
- —
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