For a competitive firm, the level of output that maximizes profits is where marginal revenue...
Question:
For a competitive firm, the level of output that maximizes profits is where marginal revenue _____ marginal cost, and for a monopolist, it is where marginal revenue _____ marginal cost.
A. is equal to; is greater than
B. is greater than; is equal to
C. is equal to; is less than
D. is equal to; is equal to
Profit
Profit is the difference in total revenue minus the total cost for a firm. A key to maximizing profit is to distinguish the firm's product from those of its competitors.
Answer and Explanation: 1
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The answer is D. For a competitive firm, the level of output that maximizes profits is where marginal revenue {eq}\underline{\text{equal to}}
{/eq}...
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How to Calculate Economic Profit: Definition & Formula
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Chapter 3 / Lesson 11
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Learn what the definition of economic profit is, and understand how to calculate it using an equation.
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