For a Perfectly Competitive Firm, at Profit Maximization

question 255

Multiple Choice

For a perfectly competitive firm, at profit maximization,

• A)market price exceeds marginal cost.
• B)total revenue is maximized.
• C)marginal revenue equals marginal cost.
• D)production must occur where average cost is minimized.

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Definitions:

Purely Competitive Firm

An enterprise that operates in a perfectly competitive market, where it is a price taker due to the homogeneity of products and the presence of many buyers and sellers.

Market Price

The market rate at which an asset or service can currently be acquired or disposed of.

Marginal Revenue

The augmented income from the sale of one more unit of a good or service.