The profit-maximizing rule MC = P is followed by:
A) a perfectly competitive firm, but not a monopoly.
B) a monopoly, but not a perfectly competitive firm.
C) both a monopoly and a perfectly competitive firm.
D) neither a monopoly nor a perfectly competitive firm.

Question

Quizplus · Accepted Answer

A perfectly competitive firm follows the rule MC = P to maximize profit, as it is a price taker and equates marginal cost to market price. A monopoly maximizes profit where marginal cost equals marginal revenue, not price.

The Profit-Maximizing Rule MC = P Is Followed By