The correct answer is: D. None of the above
At the point of equilibrium of a firm under perfect competition, the marginal revenue curve (MR) must be equal to the marginal cost curve (MC). The MC curve must be rising, while the MR curve is horizontal. This is because the firm can sell as much as it wants at the market price, so it has no incentive to charge a higher price. The firm will continue to produce until the marginal cost of producing one more unit is equal to the marginal revenue from selling one more unit. At this point, the firm is maximizing its profits.
If the MC curve were falling, the firm would be able to produce more units at a lower cost. This would increase the firm’s profits. However, the firm cannot charge a higher price than the market price, so it would not be able to sell more units. Therefore, the MC curve must be rising at the point of equilibrium.
If the MR curve were rising, the firm would be able to charge a higher price for its products. This would increase the firm’s profits. However, the firm cannot produce more units than the market demand, so it would not be able to sell more products. Therefore, the MR curve must be horizontal at the point of equilibrium.