Question

Explain the three possible profit maximizing positions of perfectly competitive firms in the short-run.

May i have a detailed explanation worth (15 marks)

Answer 1

Based on the short run, companies usually maximize their profits through identifying outputs that their marginal revenue is equal to the marginal cost.

During a short run, a company may maximize the profit if the average total cost is less compared to the price which is a symbol of a company making profit.

In the short run, a company similarly maximizes the profit if the marginal cost is the same as the price.