Both a price taker and a price searcher maximize profits (or minimize losses) by producing the quantity of output at which __________ equals __________.
A)total revenue; total cost
B)average total cost; price
C)average variable cost; marginal cost
D)marginal revenue; marginal cost
E)marginal cost; average fixed cost

Question

Quizplus · Accepted Answer

Both a price taker (in perfect competition) and a price searcher (in imperfect competition) maximize profits by producing the quantity of output at which marginal revenue equals marginal cost. This is a fundamental principle of microeconomics that applies across different market structures.

Both a Price Taker and a Price Searcher Maximize Profits