Which of the following is true at the level of output at which a competitive firm maximizes profit?

Question

Quizplus · Accepted Answer

At the level of output at which a competitive firm maximizes profit, price must be equal to marginal cost. This is because if price is greater than marginal cost, the firm can increase profit by producing more output. If price is less than marginal cost, the firm can increase profit by reducing output. Therefore, the profit-maximizing level of output occurs where price equals marginal cost. Options B and C are incorrect because they refer to the relationship between price and the wage or marginal product of labor, which are not directly relevant to determining the profit-maximizing level of output.

Which of the Following Is True at the Level of Output