Question

Which of the following is a second-order condition of short-run equilibrium of firm under perfect competition?

A MC = MR Correct Answer Incorrect Answer
B MC = Price Correct Answer Incorrect Answer
C Slope of MR < Slope of MC Correct Answer Incorrect Answer
D Slope of MC < Slope of MR Correct Answer Incorrect Answer

Solution

Slope of MR < Slope of MC, i.e., MC must be rising for profit maximization

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