PRC-2 · Chapter 5 · Question 50 of 50
For a profit function, the 'Condition for Profit Maximization' is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Marginal Revenue (MR) = Marginal Cost (MC)
Explanation
Profit is maximized when the growth in revenue perfectly balances the growth in cost. Setting P' = 0 leads to MR - MC = 0, or MR = MC.
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