A perfectly competitive firm sells its output for $100 per unit and marginal cost is $100 per unit. To maximize short-run profit, the firm should:
A) increase output.
B) decrease output.
C) maintain its current output.
D) shut down.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, a firm maximizes profit by producing output up to the point where price equals marginal cost. Since the price ($100) equals the marginal cost ($100), the firm is already maximizing its profit by maintaining its current output.

A Perfectly Competitive Firm Sells Its Output for $100 Per