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Revenue & Producer's Equilibrium · Question 34 of 55

Question 34

MediumOriginal question

By the MR–MC approach, the two conditions of producer's equilibrium are

Options for question 34

Show the answer and explanation
CorrectNot quiteAnswer A

Correct answer: A

Explanation

  1. While MR > MC, an extra unit adds to profit; while MR < MC, it subtracts. Profit peaks where they are equal.

  2. MC must also be rising there, or the next units would add profit again.

Concept
Conditions of producer's equilibrium
Typical time
70 s
Your time
—
The rule this testsProducer's equilibrium: MC = MR
Practise this chapter →

Ten questions from Revenue & Producer's Equilibrium, at your own pace.

Practise this chapter →

Ten questions from Revenue & Producer's Equilibrium, at your own pace.