For a firm in a perfectly competitive market,at the profit-maximizing level of output

Question

Quizplus · Accepted Answer

In a perfectly competitive market, the firm takes the price as given, so it has no control over it. Therefore, the profit-maximizing level of output occurs where marginal cost equals marginal revenue. At this point, the firm is producing where the price it receives for each unit sold is equal to the additional revenue it would earn from selling one more unit, which means that Price = Marginal Revenue. Additionally, since the firm is producing at the lowest point on the marginal cost curve, it must be the case that Price = Marginal Cost. Therefore, in a perfectly competitive market, at the profit-maximizing level of output, Price = Marginal Revenue = Marginal Cost.

For a Firm in a Perfectly Competitive Market,at the Profit-Maximizing