A competitive firm maximizes its profits (or minimizes is losses) by producing the quantity where the market price equals the firm's:

Question

Quizplus · Accepted Answer

A competitive firm maximizes its profits (or minimizes its losses) by producing at the quantity where marginal cost equals the market price. Producing where average total cost or average variable cost equals price would result in losses. Producing where average fixed cost equals price would not be profit-maximizing as the firm would still have to cover its variable costs.

A Competitive Firm Maximizes Its Profits (Or Minimizes Is Losses)