CBSE Class 12-commerce Answered
What will be the case if the firm increases its output, even
when MR is equal to MC?
Asked by Topperlearning User | 25 Apr, 2016, 02:51: PM
Expert Answer
In a situation, when MR is equal to MC, any increase in output would mean MC is greater than MR (MC>MR). This is because under perfect competition, MR is assumed to be constant and at the point of equilibrium MC is rising. Also, when the difference between the total revenue and total variable cost tends to decrease or firm’s gross profit starts declining.
Answered by | 25 Apr, 2016, 04:51: PM
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