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WAEC Economics 2011 Question 20

Question 20

Market Structures

A market structure where profit is maximized when marginal revenue, marginal cost and price are equal is known as

  1. A.perfect competition.
  2. B.monopoly.
  3. C.oligopoly.
  4. D.imperfect competition.
Show the answer and explanation

Answer: A (perfect competition.)

Explanation

Only under perfect competition is price equal to MR, so P = MR = MC at the best output.