Paper 2 · profit/loss minimisation
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 at the output where MR = MC.
ZIMSEC Economics Paper 2, June 2009, Q8
