The profit-maximizing output of a competitive firm is indeed given by the condition MR=MC, which stands for Marginal Revenue equals Marginal Cost. This is the point where the cost of producing an additional unit of output (marginal cost) equals the revenue gained from selling that additional unit (marginal revenue).

This condition can also be written as P=MC in a perfectly competitive market. Here's why:

1. In a perfectly competitive market, the price (P) that a firm can sell its product is determined by the market and is equal to the firm's marginal revenue (MR). This is because the firm, being a price taker, can sell as much quantity as it wants at the market price. So, MR=P.

2. Combining this with the profit-maximizing condition MR=MC, we get P=MC.

The conditions P=AC and MR=AC are not typically used to determine the profit-maximizing output level. P=AC is the condition for a firm to break even (i.e., total revenue equals total cost), and MR=AC doesn't have a standard interpretation in the context of profit maximization.

Question

The profit-maximizing output of a competitive firm is indeed given by the condition MR=MC, which stands for Marginal Revenue equals Marginal Cost. This is the point where the cost of producing an additional unit of output (marginal cost) equals the revenue gained from selling that additional unit (marginal revenue).

This condition can also be written as P=MC in a perfectly competitive market. Here's why:

1. In a perfectly competitive market, the price (P) that a firm can sell its product is determined by the market and is equal to the firm's marginal revenue (MR). This is because the firm, being a price taker, can sell as much quantity as it wants at the market price. So, MR=P.

2. Combining this with the profit-maximizing condition MR=MC, we get P=MC.

The conditions P=AC and MR=AC are not typically used to determine the profit-maximizing output level. P=AC is the condition for a firm to break even (i.e., total revenue equals total cost), and MR=AC doesn't have a standard interpretation in the context of profit maximization.

Knowee AI · Accepted Answer

The profit-maximizing output of a competitive firm is indeed given by the condition MR=MC, which stands for Marginal Revenue equals Marginal Cost. This is the point where the cost of producing an additional unit of output (marginal cost) equals the revenue gained from selling that additional unit (marginal revenue).

This condition can also be written as P=MC in a perfectly competitive market. Here's why:

1. In a perfectly competitive market, the price (P) that a firm can sell its product is determined by the market and is equal to the firm's marginal revenue (MR). This is because the firm, being a price taker, can sell as much quantity as it wants at the market price. So, MR=P.

2. Combining this with the profit-maximizing condition MR=MC, we get P=MC.

The conditions P=AC and MR=AC are not typically used to determine the profit-maximizing output level. P=AC is the condition for a firm to break even (i.e., total revenue equals total cost), and MR=AC doesn't have a standard interpretation in the context of profit maximization.

The profit maximising output of a competitive firm is given as, MR=MC. This may also be written as;Group of answer choicesP=ACP=MCMR=PMR=AC

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The profit maximising output of a competitive firm is given as, MR=MC. This may also be written as;

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