Suppose Bright Orange is large firm that grows and harvests oranges. Each orange yields 2 ounces of orange juice and exactly one orange peel. Bright Orange sells the orange juice to juice distributors and the orange peels to fragrance companies. If the market for oranges is perfectly competitive, Bright Orange will determine its profit- maximizing output level based on _______.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms determine their profit-maximizing output level based on the market price of the final product they sell, which in this case is the orange.

Suppose Bright Orange Is Large Firm That Grows and Harvests