Answer to Question #226862 in Economics for Bea

Question

• At what price should a firm produce to maximise profits in a perfectly competitive market? A. where price equals average revenue
•  B. where price equals marginal revenue
•  C. where price equals marginal cost
•  D. where price equals total revenue

Answer 1

To maximise profits in a perfectly competitive market a firm should produce where price equals marginal cost. So, the correct answer is C.