Table 13-4

-Refer to Table 13-4.For a firm operating in a competitive market,the price is

Question

Table 13-4
 
-Refer to Table 13-4.For a firm operating in a competitive market,the price is

Quizplus · Accepted Answer

In a competitive market, the firm faces a horizontal demand curve, meaning that it has no market power to influence the price. Therefore, to maximize profit, the firm should produce at the quantity where marginal cost (MC) equals price (P). Looking at the table, the quantity where MC equals P is 3, and at that quantity, the price is $15. Therefore, the firm should set a price of $15 to maximize profit.

Table 13-4 -Refer to Table 13-4.For a Firm Operating in a Competitive