MR+=+MC+Rule+for+Finding+Equilibrium+Quantity

In a previous unit, we learned about Marginal Benefits and Marginal Costs. The Marginal Revenue and Marginal Costs are similar to this. When the marginal benefit of attaining a certain good exceeds the marginal cost, it is beneficial. Goods should be continued to be acquired up until the point where the marginal benefit is equal to the marginal cost. This point can be considered equilibrium. The MR=MC rule for finding equilibrium quantity mimics this. When marginal revenue exceeds marginal cost, it is in favor of a firm to continue production. At a certain point, marginal revenue becomes equal to marginal cost. Production should increase up until this point where it should stay in order to have perfect competition and equilibrium. The MR=MC rule is one of the most important rules in economics. It will make or break your whole firm's status.
 * MR=MC Rule For Finding Equilibrium Quantity**

This is a graph that illustrates the point where MR=MC and how firms should move along to maximize profit in perfect competition.

media type="youtube" key="k8l--J5iJ8w" height="344" width="425" This Video explains the whole MR=MC equilibrium.

Bonus Question: True or False. You keep producing when MR=MC.

TRUE [|Review of Economic Principles] [|Economic Principles] [|MR=MC Perfect Competition]**
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