Under perfect competition, a producer's equilibrium is determined when ____________.
Answer & explanation
Correct answer: option 3
The correct answer is option 3: MR= MC
- A producer's equilibrium (or profit-maximizing output) occurs when Marginal Revenue (MR) = Marginal Cost (MC).
- This is the point where the firm maximizes its profit or minimizes its losses, as producing more or less than this level would either reduce profit or increase losses.