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JAMB Economics 1992 Question 20

Question 20

Market Structures

A firm with marginal cost equal to its marginal revenue will produce the equilibrium output if it is in

  1. A.pure competition only
  2. B.pure monopoly only
  3. C.monopolistic competition only
  4. D.any type of market
Show the answer and explanation

Answer: D (any type of market)

Explanation

MC = MR is the profit-maximising rule for every firm, whatever the market structure.