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A.
firm must show that it is profitable
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B.
marginal cost must be equal to average revenue
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C.
marginal revenue curve is above the average revenue curve
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D.
marginal cost curve cuts the marginal revenue curve from below
Correct Answer: Option D
Explanation
A firm is said to be in equilibrium when it satifies the following conditions:
- the first conditon for the equilibrium of the firm is that its profit should be maximum
- Marginal cost should be equal to marginal revenue
- Marginal cost must cut Marginal revenue from below
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