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Profit maximization occurs when marginal cost exceeds marginal revenue fixed costs equal variable costs marginal cost equals marginal revenue fixed costs exceeds variable costs

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Profit maximization occurs when
marginal cost exceeds marginal revenue
fixed costs equal variable costs
marginal cost equals marginal revenue
fixed costs exceeds variable costs

Profit maximization occurs when marginal cost exceeds marginal revenue fixed costs equal variable costs marginal cost equals marginal revenue fixed costs exceeds variable costs

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JackProfessional · Tutor for 6 years

Answer

Marginal cost equals marginal revenue

Explain

Profit maximization in economic theory happens at the point where marginal cost (MC) is equal to marginal revenue (MR). This signifies where the expense of generating an additional unit of a service or good is just as much as the revenue produced from selling that unit. Producing further units will lead to a loss, while manufacturing less units equates to failure in realizing possible profits. <br /><br />Essentially, Fixed Costs (FC) and Variable Costs (VC) do not primarily concern the marginal aspects considered for profit maximization. Therefore, the accurate answer is "marginal cost equals marginal revenue".
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