Author Question: What is the profit maximizing (loss minimizing) quantity for the perfectly competitive firm to ... (Read 45 times)

Jipu 123 · **on:** Jun 30, 2018

What is the profit maximizing (loss minimizing) quantity for the perfectly competitive firm to produce?

Question 2

Marginal utility can be measured by the change in:
a. total utility / the change in quantity.
b. income / the change in utility.
c. quantity / the change in income.
d. price / the change in utility.
e. income / the change in price.

af · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

The profit maximizing (loss minimizing) quantity for any firm to produce exists at that output level in which marginal revenue equals marginal cost (MR = MC). For the perfectly competitive firm, price (P) equals marginal revenue. Therefore, the profit maximizing quantity for the perfectly competitive firm to produce exits at that output level where P = MC.

Answer to Question 2

a