A firm maximizes its total profit when _________.

TR = TC

No worries! We‘ve got your back. Try BYJU‘S free classes today!

TC > TR

No worries! We‘ve got your back. Try BYJU‘S free classes today!

MR = MC

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

AR = AC

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is C MR = MC
Marginal Cost (MC) is the additional cost of producing an additional unit of output; while, Marginal Revenue (MR) is the revenue generated from the sale of additional unit of output.
The profit maximization of a firm is achieved when its marginal revenue is equal to marginal cost of the additional unit of output.

Suggest Corrections

Similar questions

T R = T C

For maximizing profits, a firm must produce at a level where

The profit-maximizing condition for a monopoly firm is ________.

What conditions must hold if a profit-maximizing firm produces positive output in a competitive market?

Join BYJU'S Learning Program