Answer to Question #228102 in Macroeconomics for Emy

Question

Describe how firms determine the optimum amount of the variable input and the best
stage of production in a short run production function. Give an adequate justification
mathematically and graphically

Answer 1

For every firm competing perfectly, they prefer every level of output maximizing the profits. Main determination for the firms in maximizing their profits is about calculating output's optimum where the Market price = Marginal cost.