Respuesta :

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The primary purpose of a firm is to make "Profit" in the Long-run.

  • The maximization of profit in a firm occurs at the level of output where the marginal revenue equal to marginal cost [tex]{MR = MC}[/tex].

  • As we know, the goal of a firm is to maximize profits and minimize losses, so a shutdown is immininent if a firm is operating at the level of output where marginal revenue is not equal or lesser that marginal cost.

In conclusion, firm kept expanding its production capacity as long as its Marginal Revenue is greater than Marginal Cost [tex]{MR > MC}[/tex] but this changes when  marginal revenue is equal to marginal cost [tex]{MR = MC}[/tex].

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https://brainly.com/question/14189505

Answer:

Marginal revenue is equal to marginal cost

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