Economics · Market Theory and Production Decisions
If marginal cost (MC) is rising and marginal revenue (MR) is falling, what optimal decision rule should a profit-maximizing firm follow to achieve equilibrium?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Increase output indefinitely
- 2Stop production immediately
- 3Produce up to the level where MC = MR✓
- 4Produce until average cost (AC) is minimum
Correct answer
Produce up to the level where MC = MR
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