A firm in many differentiated sellers produces a level of output at the point at which:
A) the marginal revenue is equal to average total cost.
B) the price is equal to average total cost.
C) the price is equal to the marginal cost.
D) marginal revenue is equal to marginal cost.

Question

Quizplus · Accepted Answer

In a market with many differentiated sellers, a firm maximizes profit by producing at the level of output where marginal revenue equals marginal cost. This is a fundamental principle of profit maximization in microeconomics.

A Firm in Many Differentiated Sellers Produces a Level of Output