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WAEC Economics 1998 Question 23

Question 23

Market Structures

An imperfect competitor is in equilibrium when

  1. A.Marginal Cost (MC) is equal to Marginal Revenue (MR)
  2. B.Marginal Revenue (MR) is equal to Price (P)
  3. C.Average Revenue (AR) is equal to Average Cost (AC)
  4. D.Output (Q) is equal to Average Revenue (AR)
  5. E.Average Revenue (AR) is equal to Marginal Revenue (MR)
Show the answer and explanation

Answer: A (Marginal Cost (MC) is equal to Marginal Revenue (MR))

Explanation

Every profit-maximising firm is in equilibrium where MC = MR.