A firm's cost and revenue curves are illustrated in the diagram below:
Which output level represents the firm's profit-maximising position, and what condition determines its revenue-maximising position?
Profit-maximising output is Q1Q_1Q1; revenue-maximising condition is MR=0MR = 0MR=0
Profit-maximising output is Q2Q_2Q2; revenue-maximising condition is MC=MRMC = MRMC=MR
Profit-maximising output is Q1Q_1Q1; revenue-maximising condition is AR=ACAR = ACAR=AC
Profit-maximising output is Q4Q_4Q4; revenue-maximising condition is MR=0MR = 0MR=0
