Question

Marginal revenue equals marginal cost profit maximization

Answer 1

This strategy is based on the fact that the total profit reaches its maximum point where marginal revenue equals marginal profit. This is the case because the firm will continue to produce until marginal profit is equalto zero, and marginal profit equals themarginal revenue (MR) minus themarginal cost (MC).

Answer 2

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The statement that marginal cost = marginal revenue leads to profit maximization or loss minimization is true only if marginal cost is rising at the point of equality