Economic analysis assumes that,for each output level,the firm
A)operates at minimum point of its average total cost curve
B)operates at minimum point of its long-run average total cost curve
C)seeks lowest possible cost of producing that quantity of output
D)produces at maximum point of its total revenue curve
E)produces at maximum point of its total product curve

Question

Quizplus · Accepted Answer

Economic analysis assumes that firms seek to minimize their costs while producing a particular level of output. Therefore, the firm produces at the point where the marginal cost equals the marginal revenue, which is also where the firm's average total cost is at its lowest. This is known as the profit-maximizing output level for the firm.

Economic Analysis Assumes That,for Each Output Level,the Firm