The correct answer is C. MC=MR.
A firm is in equilibrium when it is maximizing its profits. This occurs when the marginal revenue (MR) is equal to the marginal cost (MC). If MR>MC, the firm can increase its profits by producing more output. If MC>MR, the firm can increase its profits by producing less output. When MR=MC, the firm is producing the optimal amount of output and is making the maximum profit possible.
Option A is incorrect because if MR>MC, the firm can increase its profits by producing more output.
Option B is incorrect because if MC>MR, the firm can increase its profits by producing less output.
Option D is incorrect because MC=AC is the condition for a firm to be in a long-run equilibrium position. In the short run, a firm can be in equilibrium even if MC>AC.