The second-order condition for a firm maximizing its profits operating in a perfectly competitive market is: A) (d²π/dQ²)

Question

The second-order condition for a firm maximizing its profits operating in a perfectly competitive market is: A) (d²π/dQ²) < 0. B) - (d²C(Q)/dQ²) < 0. C) - (dMC/dQ) < 0. D) All of the statements associated with this question are correct.

Quizplus · Accepted Answer

The second-order condition for a firm maximizing its profits operating in a perfectly competitive market is that the second derivative of the profit function with respect to output is negative. This means that the marginal cost curve must be upward sloping.

The Second-Order Condition for a Firm Maximizing Its Profits Operating