The profit-maximizing quantity for a competitive firm to set in the short run is that quantity at which the price received equals the marginal cost of production, provided that this price is greater than the average variable cost of production.

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This is the definition of the profit-maximizing quantity for a competitive firm in the short run. By setting the quantity at which price equals marginal cost (and for prices greater than average variable cost), the firm ensures that it is earning the maximum amount of profit possible.

The Profit-Maximizing Quantity for a Competitive Firm to Set in the Short