Which is necessarily true for a purely competitive firm in short-run equilibrium?
A)Marginal revenue minus marginal cost equals zero.
B)Price minus average total cost equals zero.
C)Total revenue minus total cost equals zero.
D)Marginal revenue is zero.

Question

Quizplus · Accepted Answer

In a purely competitive firm in short-run equilibrium, the condition for profit maximization is where marginal revenue (MR) equals marginal cost (MC). This ensures the firm is producing at a level where it cannot increase profit by either increasing or decreasing output.

Which Is Necessarily True for a Purely Competitive Firm in Short-Run