Assume Dell Computer Company operates in a perfectly competitive market producing 5,000 computers per day. At this output level, price equals this firm's marginal cost. To maximize profits, Dell should
A) make no adjustments as they are already maximizing their profits.
B) increase their output.
C) decrease their output.
D) stop producing since it is earning a loss.

Question

Quizplus · Accepted Answer

Since price equals marginal cost, Dell is already operating at a point where profits are maximized. Therefore, they do not need to make any adjustments to their output level.

Assume Dell Computer Company Operates in a Perfectly Competitive Market