AP MicroeconomicsMarket Structures
Profit Maximization Rule (MR = MC)
Profit is maximized when marginal revenue equals marginal cost.
If MR > MC, producing more adds to profit; if MR < MC, producing less increases profit. At MR = MC, the firm produces the quantity where the additional revenue from the last unit equals its additional cost.
Formula / Example
MR = MC
Interactive graph
Perfect Competition →
Drag the curves and see it for yourself.
Study module
Perfect Competition →
Full lesson, practice questions, and flashcards.