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Figure: The Profit-Maximizing Output and Price
-(Figure: The Profit-Maximizing Output and Price) Look at the figure The Profit-Maximizing Output and Price. A perfect competitor would produce at a price of _____ and output of _____ units.
A) $600; 8
B) $200; 8
C) $200; 16
D) $600; 16

Question

Use the following to answer questions:
Figure: The Profit-Maximizing Output and Price 
-(Figure: The Profit-Maximizing Output and Price) Look at the figure The Profit-Maximizing Output and Price. A perfect competitor would produce at a price of _____ and output of _____ units.
A) $600; 8 
B) $200; 8 
C) $200; 16 
D) $600; 16

Quizplus · Accepted Answer

In perfect competition, firms produce where price equals marginal cost. Assuming the figure shows marginal cost intersecting demand at $200 and 16 units, this is the profit-maximizing point for a perfect competitor.

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