In a competitive market, each unit of output is produced at the lowest marginal cost possible for that level of production, so the total industry costs of production are minimized.

Question

Quizplus · Accepted Answer

This is because in a competitive market, firms must constantly strive to reduce their costs in order to remain competitive. As a result, firms will produce each unit of output at the lowest marginal cost possible, which will help to minimize the total industry costs of production.

In a Competitive Market, Each Unit of Output Is Produced