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Solution:
The first order condition for the profit of a firm to be maximum is (b) MC = MR, where MC represents the marginal cost of production and MR represents the marginal revenue of the firm.
When the marginal revenue earned from selling an additional unit of output is equal to the marginal cost of producing that additional unit, the profit-maximizing level of output is achieved.
At this point, any further increase in production would result in marginal costs exceeding marginal revenue, leading to a decline in profits.
Option (a) AC = MR represents the condition for the firm to operate at minimum average cost, while option (c) MR = AR represents the condition for the firm to maximize revenue. Option (d) AC = AR is not a commonly used condition in economics.
Correct option is (b)