2. To maximize profits, this firm will produce at what output level (one letter)

Question

     2. To maximize profits, this firm will produce at what output level (one letter)?

    3. Explain why this MR=MC position is the profit-maximizing position for any firm.

     4. What is the product price (one letter)?

      5. What is this firm’s average revenue (one letter)?

      6. At profit-maximizing output, what is this firm’s average variable cost (one letter)?

How do you know that the firm represented in the graph above is a purely competitive firm? 2. To maximize profits, this firm will produce at what output level (one letter)? 3. Explain why this MR=MC position is the profit-maximizing position for any firm. 4. What is the product price (one letter)? 5. What is this firm?s average revenue (one letter)? 6. At profit-maximizing output, what is this firm?s average variable cost (one letter)?

Explanation / Answer

1. we know because MR is demand and it is constant. This only happens in perfect competition. 2. C 3. This is the point where there is o economic profit and there is no social welfare loss. 4. E 5. B 6. A Hope this helsp

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