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Economics (AS & A Level) · Oct / Nov 2025 · Paper 33 · Question 8

9708Efficiency and market failure

Assuming there are no externalities, where would a nationalised firm set output to maximise social welfare?

  1. Awhere average revenue equals average cost
  2. Bwhere average revenue equals marginal cost
  3. Cwhere marginal revenue equals marginal cost
  4. Dwhere marginal revenue is zero

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Correct answer: B. where average revenue equals marginal cost

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