Explain the condition of a firm based on MC and MR.

1.	Explain the condition of a firm based on MC and MR.
Answer» Solution :ACCORDING to this approach, the producer is in equilibrium when the Marginal Revenue (MR) is EQUAL to the Marginal Cost (MC) and Marginal Cost curve cuts the Marginal Revenue curve from below. TWO CONDITIONS under this approach are:(i) MC = MR(ii) MC curve should cut the MR curve from below.

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