Paper 1 · June 2009 · Costs and Revenue
To minimize loss, a firm must produce that output which
Aequates average revenue and average cost.
Bequates marginal revenue and marginal cost.
Cequates marginal revenue and average cost.
Dminimizes loss per unit of output.
Explanation
To minimise loss (or maximise profit), a firm must produce where MR = MC. This is the profit-maximising / loss-minimising condition.
ZIMSEC Economics Paper 1, June 2009, Q8