A firm under perfect competition will maximize profits when its
A)total revenue is equal to its total cost
B)marginal revenue is equal to its marginal cost
C)the difference between marginal revenue and marginal cost is the greatest
D)total cost is greater than total revenue

Question

Quizplus · Accepted Answer

A firm under perfect competition maximizes profits when its marginal revenue (MR) is equal to its marginal cost (MC). This is because producing one more unit of output adds exactly the same amount to the firm's revenue as it does to the firm's cost, meaning profit is maximized at this point.

A Firm Under Perfect Competition Will Maximize Profits When Its