For a perfectly competitive firm,profit maximization requires producing ________.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, the firm faces a horizontal demand curve, which means that the marginal revenue is equal to the price. Therefore, profit maximization occurs at the point where marginal revenue equals marginal cost. This is because at this point, the additional cost of producing one more unit is exactly equal to the additional revenue earned from selling that unit. Any other level of output would either result in lower profits or loss.

For a Perfectly Competitive Firm,profit Maximization Requires Producing ________