In a free market, a firm's rate of output is determined
A)where marginal social cost equals marginal social benefit
B)where marginal private benefit equals marginal social benefit
C)where marginal social cost equals marginal private cost
D)where marginal private cost equals marginal private benefit
E)by government

Question

Quizplus · Accepted Answer

In a free market, firms aim to maximize profit, which occurs where marginal private cost equals marginal private benefit (or marginal cost equals marginal revenue).

In a Free Market, a Firm's Rate of Output Is