What quantity should the purely competitive firm produce to maximize profits? Analyze from a total revenue and total cost perspective and a marginal revenue and marginal cost perspective
What will be an ideal response?
From an MC–MR perspective, the firm should produce where MR or price equals MC. From a TC–TR perspective, the firm should produce where the excess of TR over TC is a maximum or where the excess of TC over TR is a minimum (and less than total fixed costs).
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Accounting profit is usually smaller than economic profit.
Answer the following statement true (T) or false (F)
Having a competitive advantage emanates from
a. Increased price b. Decreased cost c. One or both of the above d. None of the above
If a variable other than the price level changes, the AD curve shifts
a. True b. False
The M1 money supply is composed of:
A. checkable deposits and currency. B. savings deposits and time deposits. C. money market mutual funds held by businesses. D. money market mutual funds held by individuals.