Answer to Question #79146 in Economics of Enterprise for Shafee Kock

Question

discuss the profit maximizing position of a perfectly competitive firm in both the short run and long run

Answer 1

In short run, a firm maximizes its profit by choosing an output at which MC = MR = P.
In long run, all factors of production are variable, which means that the entrepreneur can adjust plant size or increase their output to achieve maximum profit. Perfect competition long run equilibrium results in all firms receiving normal profits or zero economic profits.
Source:
https://www.intelligenteconomist.com/market-structure-perfect-competition-long-run/