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Question
For maximization of profits, MR = MC is the first order condition under which of the following market structures?
For maximization of profits, MR = MC is the first order condition under which of the following market structures?
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Solution
The correct option is C Monopoly as well as perfect competition
A firm in a competitive market and monopoly market maximizes its profit when
marginal cost is equal to the marginal revenue which means that the change in
total revenue if an additional unit of output is sold is equal to the change in
total cost if an additional unit of the same output is produced.
A firm in a competitive market and monopoly market maximizes its profit when marginal cost is equal to the marginal revenue which means that the change in total revenue if an additional unit of output is sold is equal to the change in total cost if an additional unit of the same output is produced.
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