In the short run, a purely competitive firm that seeks to maximize profit will produce
A) where the demand and the ATC curves intersect.
B) where total revenue exceeds total cost by the maximum amount.
C) that output at which economic profits are zero.
D) at any point where the total revenue and total cost curves intersect.

Question

Quizplus · Accepted Answer

In the short run, a purely competitive firm maximizes profit by producing the output level where the difference between total revenue and total cost is the greatest, which is option B.

In the Short Run, a Purely Competitive Firm That Seeks