Which of the following determines the maximum price a firm may charge for a particular quantity of output?
A)the firm's supply curve
B)opportunity costs
C)explicit and implicit costs of production
D)the minimum point of the average total cost curve
E)the demand curve facing the firm

Question

Quizplus · Accepted Answer

The demand curve facing the firm determines the maximum price that the firm can charge for a particular quantity of output because it reflects the willingness of consumers to pay for the product at different prices. If the firm charges a price higher than what customers are willing to pay, they will not purchase the product, and the firm will lose potential revenue. Therefore, the demand curve is a crucial factor in setting the price for a product.

Which of the Following Determines the Maximum Price a Firm