Q225
At the point of equilibrium of firm (under perfect competition)
A.
MC curve must be rising
AnswerB.
MC curve must be falling
C.
MR cure must be rising
D.
None of the above
Answer: Option A
Solution
Answer: Option A
Solution:
At the point of equilibrium of firm (under perfect competition) MC curve must be rising. If the firm is producing at an output level where the MC is falling, then this implies that it can further increase the profit by slightly raising the level of output. Equilibrium is established at the point where the MR is equal to MC and MC is rising.