The profit of a firm is maximized when: marginal cost is minimum. marginal revenue is less...

Question

Question

The profit of a firm is maximized when:

marginal cost is minimum.

marginal revenue is less than marginal cost.

marginal revenue is equal to marginal cost.

marginal revenue is maximum.

marginal revenue is greater than marginal cost.

Answer 1

Answer #1

Answer

Option 3

marginal revenue is equal to marginal cost.

A profit is maximum when marginal profit is zero.

Marginal profit =MR-MC

equating to zero

MR-MC=0

MR=MC

the profit is maximum when MR=MC as the marginal profit is zero and the profit is a sum of marginal profits.

Answer 2

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