A profit maximizing firm will produce at the level of output where: O A. price is...

Question

Question

A profit maximizing firm will produce at the level of output where: O A. price is equal to average variable costs O B. price

business economics

Answer 1

Answer #1

Profit maximization occur generally in the monopolist firm where marginal cost intersect the marginal revenue.

The intersection point quantity is called profit maximization quantity .

when the market is perfect competitive then price is equal to marginal revenue .

So the only option true is C

Answer 2

Similar Homework Help Questions

A profit-maximizing firm with market power will always produce a level of output where a. demand...

A profit-maximizing firm with market power will always produce a level of output where a. demand is elastic. b. demand is inelastic. c. price is greater than average total cost. d. marginal revenue is greater than average total cost.
If a monopolistically competitive firm is producing the profit-maximizing level of output and is earning an...

If a monopolistically competitive firm is producing the profit-maximizing level of output and is earning an economic profit in the short run: Select one: a. marginal revenue is less than marginal cost. b. price is less than average total costs. c. price is less than marginal cost. d. marginal revenue equals marginal cost.
A profit-maximizing monopolist will never produce at an output level where _____. A) demand is elastic...

A profit-maximizing monopolist will never produce at an output level where _____. A) demand is elastic B) demand is inelastic C) demand is perfectly elastic D) it suffers economic losses in the short run E) marginal revenue is zero

If a competitive firm's marginal costs always increase with output, then at the profit maximizing output...

If a competitive firm's marginal costs always increase with output, then at the profit maximizing output level, producer surplus is Select one: a. zero because marginal costs equal marginal revenue. b. zero because price equals marginal costs. c. positive because price exceeds average variable costs. d. positive because price exceeds average total costs. e. positive because revenues are increasing faster than variable costs
The price elasticity of demand for the output of a profit-maximizing firm is E = −4....

The price elasticity of demand for the output of a profit-maximizing firm is E = −4. This firm will mark up the price of its product above marginal cost by __________ percent. A. 25 B. 50 C. 100 D. 150 E. None of the options
what is the profit-maximizing output condition that a monopolistically competitive firm must satisfy? a) price charged...

what is the profit-maximizing output condition that a monopolistically competitive firm must satisfy? a) price charged is greater than ATC b) price charged is equal to ATC c) price is less than marginal revenue d) marginal revenue is equal to marginal cost

For a perfectly competitive firm, the output level that will maximize profit will occur where ________...

For a perfectly competitive firm, the output level that will maximize profit will occur where ________ is equal to marginal cost. Select one: a. fixed cost b. adjustable revenue c. Variable cost d. marginal revenue
7. A profit maximizing firm in a competitive market produces replica toy cars. Suppose the market...

7. A profit maximizing firm in a competitive market produces replica toy cars. Suppose the market price for replica toy cars decreases to $12. At the profit maximizing (loss minimizing) quantity of 20,000 toy cars, the ATC is equal to $15 and the AFC is equal to $5. Given these conditions the (x) firm will experience losses of $60,000 since price is less than average total cost. (y) the firm will continue to produce 20,000 toy cars since it would...
A profit-maximizing firm in a competitive market is currently producing 100 units of output

A profit-maximizing firm in a competitive market is currently producing 100 units of output. It has average revenue so $10, average total cost of $8 and fixed cost of $200. a. what is the profit?b. what is the marginal cost?c. what is its average variable cost?d. is the efficent scale of the firm more than, less than, or equal to 100 units?

To maximize profit, a price taker will expand its output as long as the sale of...

To maximize profit, a price taker will expand its output as long as the sale of additional units adds more to revenues (marginal revenues) than to costs (marginal costs). Therefore, the profit-maximizing price taker will produce the output level at which marginal revenue (and price) equals marginal cost. In a price-taker market, if a business produces efficiently (i.e., that is, where marginal revenues = marginal costs), the firm will be able to make at least a normal profit. True of...