CUET Preparation Today
A profit-maximizing firm will attain its equilibrium at that level of output where? |
The excess of total revenue over total cost is maximum. Where the excess of total cost over total revenue is maximum. Where the excess of marginal revenue over marginal cost is maximum. Where the excess of marginal cost over marginal revenue is maximum. |
The excess of total revenue over total cost is maximum. |
The correct answer is Option (1) → The excess of total revenue over total cost is maximum. A profit-maximizing firm reaches equilibrium where profit = Total Revenue (TR) – Total Cost (TC) is maximum. This can also be shown in the marginal analysis approach, where equilibrium occurs when: MR=MC and MC cuts MR from below. |
