prove that marginal cost must equal marginal revenue at the profit maximizing level of output. Anyone?.. tnx?

Answer 1

Normally cost should be always less than that of revenue then only we get profit. What happens is when infrastruture grows and grows the overheads costs keep on increasing but still the business will go on expanding upto a point where there is no more profit by increasing any further. In economic term we say that marginal cost must equal marginal revenue at which point of time there is no loss or no profit that means there is the balance and anything lower or greater would tilt the scale in one direction thereby the company may be facing loss due to less production or due to cost of prodcution more than that of sales.