Q134
The necessary condition for equilibrium position of a firm is
A.
MR>MC
B.
MC>Price
C.
MC=MR
AnswerD.
MC=AC
Answer: Option C
Solution
Answer: Option C
Solution:
The necessary condition for equilibrium position of a firm is MC=MR. A firm is in equilibrium when it has no tendency to change its level of output. It needs neither expansion nor contraction. It wants to earn maximum profits in by equating its marginal cost with its marginal revenue, i.e. MC = MR.