The necessary condition for a firm to be in equilibrium is that marginal revenue is

The necessary condition for a firm to be in equilibrium is that marginal revenue is equal to marginal cost. Marginal revenue is the additional revenue a firm receives from selling one more unit of output, while marginal cost is the additional cost of producing one more unit of output. For a firm to maximize its profit, it must produce the quantity of output where the marginal revenue equals the marginal cost. If marginal revenue is greater than marginal cost, the firm can increase its profit by producing more output. If marginal revenue is less than marginal cost, the firm can increase its profit by producing less output. Therefore, the equilibrium point is where marginal revenue equals marginal cost, and this is the level of output that the firm should produce to maximize its profit. In other words, a firm is in equilibrium when it is producing the quantity of output where the additional revenue generated from selling one more unit (marginal revenue) is exactly equal to the additional cost of producing that unit (marginal cost).