Once the profit- maximising level of output is determined, a profit- maximising firm facing a downward- sloping demand curve sets the price:
A) at the value that maximises revenue
B) by reference to the demand curve
C) by subtracting total cost from total revenue
D) where marginal revenue is equal to marginal cost

Question

Quizplus · Accepted Answer

A profit-maximizing firm facing a downward-sloping demand curve sets the price by reference to the demand curve, as it determines the highest price consumers are willing to pay for that quantity of output.

Once the Profit- Maximising Level of Output Is Determined, a Profit-