If a monopolistically competitive firm wants to maximize profits, it will increase production...
Question:
If a monopolistically competitive firm wants to maximize profits, it will increase production until
a. marginal revenue > average variable cost.
b. marginal revenue = average total cost.
c. marginal cost > marginal revenue.
d. marginal revenue = average revenue.
e. marginal revenue = marginal cost.
MR and MC
Marginal revenue is defined as the additional revenue earned by selling an additional unit of output. Marginal cost is defined as the additional cost incurred by the producer on producing an additional unit of output. MR and MC, collectively, help producers determine whether to produce more or not.
Answer and Explanation: 1
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View this answerThe correct answer is E) marginal revenue = marginal cost
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Marginal Revenue: Definition & Equation
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Chapter 2 / Lesson 13
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Learn about marginal revenue and understand how to use the marginal revenue formula. See how to calculate marginal revenue and the impact of price and marginal cost.
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