(B) A company's marginal cost must be zero at the profit maximizing level of output if a firm producing at the unit elastic point. It is because at the point with unit elasticity, changes to prices do not affect total revenue.
The demand curve can be described as a graphical representation of the relationship between the quantity demanded for a given period of time and the price of a good or service. In a typical representation, the quantity demanded on the horizontal axis while the price will appear on the left vertical axis. Based on the statement above, a marginal cost must be zero because changes in quantity exactly offsets changes in price.
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