In the standard model of pure competition in the short run, a profit-maximizing firm will produce the output quantity where the gap between
A)marginal revenue and marginal cost is the largest, with revenue higher than cost.
B)average revenue and average cost is the largest, with revenue higher than cost.
C)total revenue and total cost is the largest, with revenue higher than cost.
D)average revenue and average variable cost is the largest.

Question

Quizplus · Accepted Answer

In pure competition, a firm maximizes profit by producing where marginal cost equals marginal revenue. However, the largest profit occurs where the difference between total revenue and total cost is the greatest, with total revenue exceeding total cost.

In the Standard Model of Pure Competition in the Short