In perfectly competitive markets, profits are maximized when:

Name: In perfectly competitive markets, profits are maximized when:
Brand: Quizplus
Rating: 4.9 (47 reviews)

Question

Quizplus · Accepted Answer

In perfectly competitive markets, firms are price takers, which means they have to accept the market price. Therefore, the marginal revenue (MR) is equal to the price (P). In order to maximize profits, firms must produce at the point where the marginal cost (MC) equals the marginal revenue (MR), which is also equal to the price (P). Therefore, the correct choice is C.

In Perfectly Competitive Markets, Profits Are Maximized When