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A firm under perfect competition will be making minimum losses (in the short run) at a point where:
  • a)
    MC > MR
  • b)
    MR> MC
  • c)
    MC = MR
  • d)
    AC = AR
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
A firm under perfect competition will be making minimum losses (in the...
= MR and MC > ATC
b)MC = MR and MC < />
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d)MC > MR and MC = ATC

The correct answer is a) MC = MR and MC > ATC.

In perfect competition, a firm aims to maximize its profits by producing at the level where marginal cost (MC) equals marginal revenue (MR). However, if the MC is lower than the average total cost (ATC), the firm will be incurring losses. Therefore, to minimize these losses, the firm must produce at the level where MC = MR and MC > ATC. At this point, the firm will be able to cover its variable costs and make a contribution towards its fixed costs, minimizing its losses in the short run.
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A firm under perfect competition will be making minimum losses (in the...
C
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A firm under perfect competition will be making minimum losses (in the short run) at a point where:a)MC > MRb)MR> MCc)MC = MRd)AC = ARCorrect answer is option 'C'. Can you explain this answer?
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