The profit-maximizing level of output for any firm is where MR = MC.

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This is a basic principle of microeconomics, known as the profit-maximizing rule. When a firm produces at a level where marginal revenue (MR) equals marginal cost (MC), it maximizes its profit or minimizes its losses, as long as it covers its fixed costs. This rule applies to all types of firms, whether they operate in a perfectly competitive or monopolistic market.

The Profit-Maximizing Level of Output for Any Firm Is Where