Why does a firm in perfect competition produce the quantity at which marginal cost equals price? In a perfectly competitive market, the price of a handsaw is $25. When a firm maximizes its profit, it produces 6 handsaws a day. Draw the marginal revenue curve. Label it. Draw the marginal cost curve that illustrates the profit-maximizing output. Label it. Draw a point at the profit-maximizing output and price. A firm produces the quantity at which marginal cost equals price because when marginal cost is greater than price, the firm O A. can increase economic profit by producing 1 less handsaw O B. is maximizing economic profit O C. is at its shutdown point O D. can increase economic profit by producing 1 more handsaw 50- 45- 40- 35- 30- 25- 20- 15- 10- 5- 0- Price (dollars per handsaw) 0 8 Quantity (handsaws per day) >>> Draw only the objects specified in the question. 10

Why does a firm in perfect competition produce the quantity at which marginal cost equals price? In a perfectly competitive market, the price of a handsaw is $25. When a firm maximizes its profit, it produces 6 handsaws a day. Draw the marginal revenue curve. Label it. Draw the marginal cost curve that illustrates the profit-maximizing output. Label it. Draw a point at the profit-maximizing output and price. A firm produces the quantity at which marginal cost equals price because when marginal cost is greater than price, the firm O A. can increase economic profit by producing 1 less handsaw O B. is maximizing economic profit O C. is at its shutdown point O D. can increase economic profit by producing 1 more handsaw 50- 45- 40- 35- 30- 25- 20- 15- 10- 5- 0- Price (dollars per handsaw) 0 8 Quantity (handsaws per day) >>> Draw only the objects specified in the question. 10

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter7: Perefect Competition

Section: Chapter Questions

Problem 9SQP

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