Asked by
Taurus Ragin Jr
on Oct 12, 2024
Verified
A profit-maximizing perfectly competitive firm will
A) produce an output at which marginal cost equals marginal revenue.
B) produce an output at which marginal cost equals price.
C) have a marginal cost curve that intersects the minimum point of its average total cost curve.
D) A perfectly competitive firm will do all of these things.
Perfectly Competitive Firm
A business that operates in a perfectly competitive market, where it is a price taker due to the presence of many sellers offering homogeneous products.
Marginal Cost
The cost incurred by producing one more unit of a good or service.
Marginal Revenue
The increase in revenue that results from the sale of one additional unit of a product or service.
- Comprehend the principle of marginal revenue and its impact on decisions aimed at maximizing profits or minimizing losses.
- Illustrate the conditions of perfect competition and the performance of corporations partaking in this economic framework.
- Acknowledge the particular scenarios in which a business entity maximizes its profitability, minimizes its losses, or breaks even, emphasizing the significance of average total cost (ATC), marginal cost (MC), and marginal revenue (MR).
Verified Answer
OS
Learning Objectives
- Comprehend the principle of marginal revenue and its impact on decisions aimed at maximizing profits or minimizing losses.
- Illustrate the conditions of perfect competition and the performance of corporations partaking in this economic framework.
- Acknowledge the particular scenarios in which a business entity maximizes its profitability, minimizes its losses, or breaks even, emphasizing the significance of average total cost (ATC), marginal cost (MC), and marginal revenue (MR).