Assume a perfectly competitive firm sells its output for $150 per unit.At its current 2,000 units of output,marginal cost is $140 and increasing,and average variable cost is $143.Assuming it wants to maximize its profits,it should:

Question

Quizplus · Accepted Answer

Since the marginal cost ($140) is less than the price ($150), the firm should increase output to maximize profits.

Assume a Perfectly Competitive Firm Sells Its Output for $150