A perfectly competitive firm faces a market clearing price of $150 per unit. Average total costs are at the minimum value of $120 per unit at an output rate of 70 units. Marginal cost equals $150 per unit at an output rate of 75 units. It can be concluded that the short-run profit-maximizing output rate is

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In a perfectly competitive market, firms maximize profits where marginal cost equals market price. Here, marginal cost equals the market price of $150 at an output of 75 units, indicating profit maximization at this output. Since the average total cost at 70 units (which is close to 75 units) is $120, and the price is $150, the firm is making a profit of $30 per unit at an output of 75 units, assuming the average total cost does not increase significantly between 70 and 75 units.

A Perfectly Competitive Firm Faces a Market Clearing Price of $150