McqMate
| Q. |
Equilibrium price in the market is determined by the - |
| A. | equality between marginal cost and average cost. |
| B. | equality between total cost and total revenue. |
| C. | equality between average cost and average revenue. |
| D. | equality between marginal cost and marginal revenue. |
| Answer» D. equality between marginal cost and marginal revenue. | |
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Explanation: The equilibrium price is the market price where the quantity of goods supplied is equal to the quantity of goods demanded. This is the point at which the demand and supply curves in the market intersect. Both under perfect competition and monopolisticcompetition, the firm is in equilibrium at the point of equality of marginal cost and marginal revenue. (MC = MR). |
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