A pasta producer is in a perfectly competitive market.To maximize profits,the pasta producer should produce the output level where

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Quizplus · Accepted Answer

In a perfectly competitive market, the pasta producer is a price taker and cannot influence the price. Therefore, to maximize profits, the producer should produce at the level where marginal cost (MC) equals price (P). This is because producing any additional unit of output would cost more than the price received for it, resulting in lower profits. Producing less than the level where MC equals P would mean leaving potential profits on the table. Therefore, the best choice for the pasta producer to maximize profits is D) price equals marginal cost.

A Pasta Producer Is in a Perfectly Competitive Market