The MR=MC (Marginal Revenue equals Marginal Cost) rule is a fundamental principle in economics that applies across different market structures, not just in competitive markets or to firms that are price takers or price makers. It is used by firms to determine the optimal level of output to maximize profit, regardless of the market structure they operate in.

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The MR=MC Rule

Question 13

Multiple Choice

The MR=MC rule

A) applies to price-makers only.
B) does not vary by market structure.
C) is only true in competitive markets.
D) applies to price-makers that have MR=P.

Correct Answer: