A Perfectly Competitive Firm Will Maximize Profit When the Quantity

question 173

Multiple Choice

A perfectly competitive firm will maximize profit when the quantity produced is such that the

• A) firm's total revenue is equal to total cost.
• B) firm's marginal revenue is equal to the price.
• C) firm's marginal revenue is equal to its marginal cost.
• D) price exceeds the firm's marginal cost by as much as possible.
• E) firm's marginal revenue exceeds its marginal cost by the maximum amount possible.

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Definitions:

Market Economy

An economic system where supply and demand determine the production and distribution of goods and services.

Basic Economic Questions

Fundamental questions addressing what to produce, how to produce, and for whom to produce in an economy.

Income

The financial gain or money received by an individual or entity, typically through wages, investments, or sales.

Economic Organization

The structured and systematic arrangement of economic activities and resource allocations within a society or among participants in the economy.