A firm in a perfectly competitive industry will maximize profits by adjusting
A) average total cost until it equals price.
B) price until marginal revenue equals marginal cost.
C) output until average revenue equals short- run average total cost.
D) price until average revenue equals average total cost.
E) output until marginal cost equals marginal revenue.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms maximize profits by producing the quantity of output where marginal cost equals marginal revenue.

A Firm in a Perfectly Competitive Industry Will Maximize Profits