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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
answered-by-expert 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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ANSWERED BY EXPERT ANSWERED BY EXPERT
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Asked by Topperlearning User | 25 Apr, 2016, 02:51: PM
ANSWERED BY EXPERT ANSWERED BY EXPERT
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