Question

A firm should produce the quantity at which marginal revenue and marginal cost are equal. True...

A firm should produce the quantity at which marginal revenue and marginal cost are equal.

True or False

Homework Answers

Answer #1

True

The main goal of any firm or company is to maximise the profit so that it also serves the customer and makes a good amount of profit

if it not able to manage it then mostly go for shut down

the reason for shut down is because the company is unable to manage its average variable cost

marginal revenue is the additional revenue that is generated by producing one extra additional unit

marginal cost is the additional cost that arises by producing one extra additional unit

so when they both are equal then company maximizes its profit and all the firms should look for it

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