A market structure where profit is maximized when marginal revenue, marginal cost and price are...
ECONOMICS
WAEC 2011
A market structure where profit is maximized when marginal revenue, marginal cost and price are equal is known as
- A. perfect competition
- B. monopoly
- C. oligopoly
- D. imperfect competition
Correct Answer: A. perfect competition
Explanation
In order to maximize profits in a perfectly competitive market, firms set marginal revenue equal to marginal cost (MR=MC). MR is the slope of the revenue curve, which is also equal to the demand curve (D) and price
Post an Explanation Or Report an Error
If you see any wrong question or answer, please leave a comment below and we'll take a look. If you doubt why the selected answer is correct or need additional more details? Please drop a comment or Contact us directly. Your email address will not be published. Required fields are marked *