Figure 7.4 Figure 7.4 shows the cost and demand curves for a profit-maximising firm in a perfectly competitive market.
-Refer to Figure 7.4.If the market price is $30,what is the firm's profit-maximising output level?

Question

Figure 7.4  Figure 7.4 shows the cost and demand curves for a profit-maximising firm in a perfectly competitive market.
-Refer to Figure 7.4.If the market price is $30,what is the firm's profit-maximising output level?

Quizplus · Accepted Answer

At the intersection of the demand curve and the marginal cost curve, the profit-maximising output level is the quantity at which the marginal cost is equal to the market price. In this case, the marginal cost curve intersects the demand curve at a quantity of 180 units at a price of $30. Therefore, the firm's profit-maximising output level is 180 units.

Figure 74 Figure 7