The perfectly competitive firm will seek to produce the output level for which

Question

Quizplus · Accepted Answer

The perfectly competitive firm will seek to produce the output level where marginal cost equals marginal revenue, as this is the point where the firm will maximize its profits. Any other output level will either result in a lower profit or a loss. While minimizing average total cost or average variable cost can be important for profitability, it is ultimately the level of output that ensures that marginal revenue and marginal cost are equal that is most important.

The Perfectly Competitive Firm Will Seek to Produce the Output