A competitive firm will maximize profits at that output at which
A) total revenue exceeds total cost by the greatest amount.
B) total revenue and total cost are equal.
C) price exceeds average total cost by the largest amount.
D) the difference between marginal revenue and price is at a maximum.

Question

Quizplus · Accepted Answer

A competitive firm maximizes profits where the difference between total revenue and total cost is the greatest, which is when marginal cost equals marginal revenue.

A Competitive Firm Will Maximize Profits at That Output at Which