Non-decreasing marginal cost condition
Also called: Rising MC condition · Topic: Theory of the Firm, Supply and Perfect Competition · NCERT: Class 12, Ch 4 "The Theory of the Firm under Perfect Competition"
Meaning
This is the second condition for profit maximisation. At the profit-maximising output, marginal cost must not be falling. In other words, the MC curve must cut the price line from below. If p = MC where MC is falling, producing slightly less would raise profit, so that point is actually a profit minimum. So p = MC alone is not enough.
Example
In NCERT Exercise 21 (price ₹10), p = MC at 1 unit, but MC is falling there and profit is −₹5. Profit peaks at 5 units (₹12), where MC is rising and crosses ₹10 from below.
Don't confuse with
- MR = MC condition: this is the first condition. It locates possible profit-maximising outputs. The non-decreasing MC condition picks the true maximum from among them.