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Difference between TR and TC is maximum when
AR=MR
MR=MC
MR=AC
MC=AC
- Option 1: AR=MR
- Average Revenue (AR) equals Marginal Revenue (MR) typically in perfect competition.
- Does not necessarily determine profit maximization directly.
- Option 2: MR=MC
- Profit is maximized when Marginal Revenue (MR) equals Marginal Cost (MC).
- At this point, the difference between Total Revenue (TR) and Total Cost (TC) is also maximized.
- Correctly identifies the condition for optimal profit.
- Option 3: MR=AC
- Implies marginal revenue equals average cost.
- Not typically a profit-maximizing condition.
- Option 4: MC=AC
- Marginal Cost (MC) equals Average Cost (AC) at the minimum point of AC.
- Not directly related to maximization of the difference between TR and TC.
Option 2: MR=MC
By: santosh ProfileResourcesReport error
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