To maximize profits, a perfectly competitive firm should produce where marginal:
A) cost equals total revenue.
B) cost exceeds marginal revenue.
C) cost equals marginal revenue.
D) revenue exceeds marginal cost.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms maximize profit by producing at the quantity where marginal cost equals marginal revenue. This is the point where the cost of producing an additional unit is exactly covered by the revenue it generates, ensuring no loss or missed profit opportunity.

To Maximize Profits, a Perfectly Competitive Firm Should Produce Where