Question

Why marginal cost is equal to marginal revenue?

Answer 1

Maximizing Profits. Economists tell us that a business can maximize its profitby producing at the level wheremarginal revenue equals marginal cost. As long as marginal revenue is greater than marginal cost, it pays to produce more. Each added unit sold will add more to revenue than tocosts.

Answer 2

Answer:

Explanation:

Firms will produce up until the point that marginal cost equals marginal revenue. ... This is the case because the firm will continue to produce until marginal profit is equal to zero, and marginal profit equals the marginal revenue (MR) minus the marginal cost (MC).