1
Question
A firm should produce where MR = MC and beyond which _________.
A firm should produce where MR = MC and beyond which _________.
Open in App
Solution
The correct option is A MC > MR
Producer attains equilibrium at MR=MC, and earns normal profit. It is also necessary that the MC beyond this point is rising, while MR is falling. Thus, any rise in production beyond MR=MC, will lead to excess marginal cost as compared to marginal revenue and the firm will incur losses.
Producer attains equilibrium at MR=MC, and earns normal profit. It is also necessary that the MC beyond this point is rising, while MR is falling. Thus, any rise in production beyond MR=MC, will lead to excess marginal cost as compared to marginal revenue and the firm will incur losses.
Suggest Corrections
0
Similar questions
Join BYJU'S Learning Program
Explore more
Join BYJU'S Learning Program
