The Following Questions Refer to the graph below,which is for a firm in a competitive market.

-The profit-maximizing price and quantity for this competitive firm are

Question

The Following Questions Refer to the graph below,which is for a firm in a competitive market.
 
-The profit-maximizing price and quantity for this competitive firm are

Quizplus · Accepted Answer

In a competitive market, the profit-maximizing condition is where marginal cost (MC) equals marginal revenue (MR), and MR is equal to the price in a competitive market. Without specific cost data, we assume the firm will choose the price where it can sell its output. Among the given options, $5 and 100 units imply a situation where the firm has possibly identified a price ($5) that consumers are willing to pay and a quantity (100) that maximizes its profit by equating MR and MC. Other options either imply a higher price, which might reduce the quantity sold in a competitive market, or a higher quantity without justification for the cost structure supporting such a decision.

The Following Questions Refer to the Graph Below,which Is for a Firm