In perfect competition,all firms charge the same market price.The only decision for managers is ________.
A) how to minimize costs
B) how to maximize average revenue
C) how much to produce
D) how to minimize marginal costs

Question

Quizplus · Accepted Answer

In perfect competition, all firms charge the same market price, so the only decision for managers is how much to produce in order to maximize profits. Since they cannot affect the price, their focus is on determining the optimal level of output that will generate the highest revenue and minimize costs to achieve maximum profits. Therefore, option C is the best choice. Options A and D are important considerations for managers, but they are not the only decisions they need to make in perfect competition, while option B is not relevant since average revenue is dictated by the market price.

In Perfect Competition,all Firms Charge the Same Market Price