All four market forms discussed in the text maximize profit where
A)P = MC.
B)AR = AC.
C)MR = MC.
D)MC = AR.

Question

Quizplus · Accepted Answer

In all market forms discussed in the text (perfect competition, monopolistic competition, oligopoly, and monopoly), profit is maximized where Marginal Revenue (MR) equals Marginal Cost (MC) because this is where the additional revenue generated by selling one more unit is equal to the additional cost of producing one more unit. Therefore, the profit-maximizing output level occurs at the point where MR=MC.

All Four Market Forms Discussed in the Text Maximize Profit