If a purely competitive firm is maximizing economic profit,
A)it is necessarily maximizing per-unit profit.
B)it may or may not be maximizing per-unit profit.
C)then per-unit profit will be minimized.
D)it is necessarily overallocating resources to its product.

Question

Quizplus · Accepted Answer

A purely competitive firm maximizes economic profit by producing where marginal cost equals marginal revenue, which does not necessarily mean that per-unit profit is maximized.

If a Purely Competitive Firm Is Maximizing Economic Profit