Figure 6.2
-Figure 6.2 shows the cost structure of a firm in a perfectly competitive market. If the market price is $10 and the firm chooses the profit maximizing output level, its profit is

Question

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In a perfectly competitive market, the firm maximizes profit where marginal cost (MC) equals market price. If the market price is $10, the firm will produce where MC = $10. The profit is calculated as (Price - Average Total Cost) x Quantity. Based on the given choices, $200 is the correct profit.

Figure 6.2 -Figure 6.2 Shows the Cost Structure of a Firm in Firm