Question 5
[Maximum number: 1]
A firm wishes to maximise its revenue.
Which condition must be met to achieve this goal?
A
average cost = average revenue
B
marginal cost = average revenue
C
marginal cost = marginal revenue
D
marginal revenue = zero
CAIE A-Level Economics 7.5.8 Revenue
Practise linking TR, AR and MR from tables and diagrams, including revenue maximisation and curves under imperfect competition.
How this is tested
- use MR equals zero to identify the output where total revenue is maximised
- match demand or MR diagrams to the corresponding total revenue curve
- calculate revenue changes from output data to infer profit or revenue-maximising ranges