A perfectly competitive firm maximizes profits by producing at the point where

A) the distance between price and average total cost is the greatest.
B) the distance between price and marginal cost is the greatest.
C) price equals marginal cost.
D) price equals average total cost.

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Valerie Gonzalez · Accepted Answer

Final Answer : C, Explanation :  In a perfectly competitive market, a firm maximizes its profits by producing at the level where price equals marginal cost (P = MC). This is because at this point, the cost of producing one more unit is exactly equal to the revenue gained from selling that unit, ensuring that profit is maximized.

A perfectly competitive firm maximizes profits by producing at the point where

A) the distance between price and average total cost is the greatest.
B) the distance between price and marginal cost is the greatest.
C) price equals marginal cost.
D) price equals average total cost.

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Learning Objectives

Related questions

A perfectly competitive firm maximizes profits by producing at the point whereA) the distance between price and average total cost is the greatest.B) the distance between price and marginal cost is the greatest.C) price equals marginal cost.D) price equals average total cost.

Definitions

Learning Objectives

Learning Objectives

Related questions

A perfectly competitive firm maximizes profits by producing at the point where

A) the distance between price and average total cost is the greatest.
B) the distance between price and marginal cost is the greatest.
C) price equals marginal cost.
D) price equals average total cost.