« previous next »

Author Question: Why does a firm in perfect competition produce the quantity at which marginal cost equals price? ... (Read 46 times)

arivle123

  • Hero Member
  • *****
  • Posts: 569
on: Jun 29, 2018
Why does a firm in perfect competition produce the quantity at which marginal cost equals price?
 
  What will be an ideal response?

Question 2

Refer to Table 4-8. If a minimum wage of 10.50 an hour is mandated, what is the quantity of labor supplied?
 
  A) 400,000 B) 370,000 C) 340,000 D) 60,000


macagn

  • Sr. Member
  • ****
  • Posts: 345
Reply #1 on: Jun 29, 2018
Answer to Question 1

A firm's total profit is maximized by producing the level of output at which marginal revenue for the last unit produced equals its marginal cost, or MR = MC. In a perfectly competitive market, MR is equal to the market price P for all levels of output. These points imply that a perfectly competitive firm will maximize profit by producing the quantity at P = MC.

Answer to Question 2

A


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Methicillin-resistant Staphylococcus aureus or MRSA was discovered in 1961 in the United Kingdom. It if often referred to as a superbug. MRSA infections cause more deaths in the United States every year than AIDS.

Methicilli ...
Did you know?

As many as 20% of Americans have been infected by the fungus known as Histoplasmosis. While most people are asymptomatic or only have slight symptoms, infection can progress to a rapid and potentially fatal superinfection.

Did you know?

Street names for barbiturates include reds, red devils, yellow jackets, blue heavens, Christmas trees, and rainbows. They are commonly referred to as downers.

Did you know?

Most fungi that pathogenically affect humans live in soil. If a person is not healthy, has an open wound, or is immunocompromised, a fungal infection can be very aggressive.

Did you know?

In the United States, there is a birth every 8 seconds, according to the U.S. Census Bureau's Population Clock.

Furchgott's discovery that endothelial cells produce a vasodilating substance. Furchgott's discovery that endothelial cells produce a vasodilating substance.
Rebound Tenderness, Apply Firm Pressure to the Abdomen Rebound Tenderness, Apply Firm Pressure to the Abdomen
Examples of the most common X-ray positions and the images they produce. Examples of the most common X-ray positions and the images they produce.
Air masses interact to produce weather Air masses interact to produce weather
Management Information Systems: Managing the Digital Firm, 15th Edition Management Information Systems: Managing the Digital Firm, 15th Edition
A company that makes cell phones has the following cost structure. They have fixed costs of ... A company that makes cell phones has the following cost structure. They have fixed costs of ...
Video: Energy Flow - Trophic Levels and Food

For a complete list of videos, visit our video library