The profit-maximizing perfect competitor will produce at that output at which

A) marginal cost equals marginal revenue.
B) total revenue is maximized.
C) average total profit is maximized.

Question

The profit-maximizing perfect competitor will produce at that output at whichA) marginal cost equals marginal revenue.B) total revenue is maximized.C) average total profit is maximized.

Clarke Davenport · Accepted Answer

Final Answer : A, Explanation :  A profit-maximizing perfect competitor will produce at the output level where marginal cost equals marginal revenue because this ensures that each additional unit produced and sold generates the same amount of revenue as it costs to produce. This maximizes profits since any additional unit produced beyond this point would cost more to produce than it would bring in revenue, decreasing overall profits. Total revenue maximization and average total profit maximization are generally not the goals of a profit-maximizing firm.

The profit-maximizing perfect competitor will produce at that output at which

A) marginal cost equals marginal revenue.
B) total revenue is maximized.
C) average total profit is maximized.

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