Refer to Figure 22.3 for a perfectly competitive firm.At a market price of $23, profit per unit is maximized at an output of
A)13 units.
B)25 units.
C)31 units.
D)39 units.

Question

Refer to Figure 22.3 for a perfectly competitive firm.At a market price of $23, profit per unit is maximized at an output of
A)13 units. 
B)25 units. 
C)31 units. 
D)39 units.

Quizplus · Accepted Answer

The profit per unit is maximized where marginal cost equals marginal revenue, which occurs at an output of 31 units in Figure 22.3. This is the point where the firm is producing where the price is equal to the marginal cost, which maximizes the profit per unit. Therefore, the best choice is C.