JAMB Economics 2011 Objective — Question 11
Question 11 of 49 from the Joint Admissions and Matriculation Board (JAMB) Economics 2011 Objective paper, with the correct answer and a full explanation.
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The optimal range of output for a perfectly competitive firm is where
- A. A. AVC is lowest
- B. B. MC is risingCorrect
- C. C. MC is falling
- D. D. AC is lowest
Explanation
The first condition for profit maximization is MC=MR; however, this is necessary but not sufficient. The second condition states that MC must be rising - the firm produces within the range where MC is increasing.
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