A Perfectly Competitive Firm Will Maximize Its Profit at the Level

question 239

Multiple Choice

A perfectly competitive firm will maximize its profit at the level of output where the vertical distance between its total revenue curve and total cost curve is the largest.This is the same level of output where

• A)average total cost equals marginal revenue.
• B)marginal revenue equals marginal profit.
• C)marginal revenue equals marginal cost.
• D)marginal revenue equals average revenue.

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Definitions:

Fabrication Line

A machine-paced, product-oriented facility for building components.

Process-Oriented Layout

A layout that deals with low-volume, high-variety production in which like machines and equipment are grouped together.

Material Handling Costs

Expenses involved in moving, protecting, storing and controlling materials throughout the manufacturing process.