Read the two statements and choose the correct option.

I. At equilibrium, a price-taking firm produces where price = MC.

II. At equilibrium, a price-taking firm always makes a profit.

Explanation

1. 01

   I is true: for a price taker MR = P, so MC = MR becomes P = MC.

2. 02

   II is false: equilibrium is the best it can do, which may be a normal profit or even a loss in the short run.