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The MR = MC rule applies Multiple Choice in the short run but not in the long run. in both the short run and the long run. in the long run but not in the short run. only to a purely competitive firm.

Respuesta :

The MR = MC rule applies in both the short run and the long run.

What is MR = MC rule?

  • The profit maximization rule is denoted by the equation MC = MR in economics, where MC stands for marginal expenses and MR for marginal revenue.
  • When marginal costs, or the change in expenses brought on by producing a new item, are equal to marginal revenues, businesses are best positioned to maximize their profits.
  • Although it appears to be a mathematical equation, this is actually an extremely complicated equation that is always changing and must account for practically every market component.
  • The change in overall cost caused by an increase in the amount produced, or the price of producing more, is known as the marginal cost.
  • The increased total revenue produced by increasing product sales by 1 unit is known as marginal revenue, a key concept in microeconomics.

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