Which of the following is always true in the short run for a perfectly competitive firm that is maximizing economic profits?

Question

Quizplus · Accepted Answer

In the short run, a perfectly competitive firm will produce where marginal revenue (MR) equals marginal cost (MC) to maximize economic profits. Since the firm is a price taker, price (P) and marginal revenue (MR) are the same, and they will also be equal to marginal cost (MC) at the profit-maximizing quantity. However, average variable cost (AVC) may or may not equal price (P), as it depends on the specific cost structure of the firm.

Which of the Following Is Always True in the Short