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    5. A firm maximizes its profit when

    Question

    A firm maximizes its profit when

    A MC > MR Correct Answer Incorrect Answer
    B MC < MR Correct Answer Incorrect Answer
    C MC = MR Correct Answer Incorrect Answer
    D MR = AP Correct Answer Incorrect Answer

    Solution

    The profit maximization of a firm is achieved when its marginal revenue (MR) is equal to marginal cost (MC) of the additional unit of output.

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