If a perfectly competitive firm is maximizing its profit and is making an economic profit,which of the following is correct?
i.Price equals marginal revenue.
ii.Marginal revenue equals marginal cost.
iii.Price is greater than average total cost.
A) i only
B) i and ii only
C) ii and iii only
D) i and iii only
E) i, ii, and iii

Question

Quizplus · Accepted Answer

In a perfectly competitive market, a profit-maximizing firm operates where price equals marginal revenue (i), marginal revenue equals marginal cost (ii), and to make an economic profit, the price must be greater than average total cost (iii).

If a Perfectly Competitive Firm Is Maximizing Its Profit and Is