Question

a.To maximize its profits, the firm should produce units and charge a price of _______$ .
b. At the profit-maximizing level of output, average total cost per unit is_________$ .
c. At its profit-maximizing level, profits are_________$ .

Answer 1

Answer:

A) where the firm's marginal revenue equals its marginal cost.

B) average total cost per unit should equal the marginal cost per unit.

C) at their highest level.

Explanation:

Profit maximizing levels where marginal revenue = marginal cost, is applicable to every type of company regardless in what type of market they operate, e.g. perfect competition, monopoly, monopolistic competition, etc.