When firms are in perfect competition the result is that firms charge a price that is always equal to its

Question

Quizplus · Accepted Answer

In perfect competition, firms are price takers, meaning they cannot influence the market price. Therefore, they have to sell their output at the market price. In this scenario, the optimal price for a firm to set is equal to its marginal cost (MC), as long as the price is above the minimum AVC (otherwise, the firm would shut down in the short run). Therefore, Choice C - MC - is the correct answer.

When Firms Are in Perfect Competition the Result Is That