At the profit-maximising level of output for a perfectly competitive firm, price equals marginal cost.Which of the following is also true?
A)The difference between total revenue and total cost is the greatest.
B)Total revenue equals total cost.
C)Average revenue equals average total cost.
D)Marginal profit equals marginal cost.

Question

Quizplus · Accepted Answer

At the profit-maximizing level of output, the firm produces where marginal cost equals price. This allows the firm to maximize the difference between total revenue and total cost, leading to the greatest possible profit. Therefore, option A is true. Options B, C, and D are not necessarily true at the profit-maximizing level of output for a perfectly competitive firm.

At the Profit-Maximising Level of Output for a Perfectly Competitive