Scenario 9.2
Consider a publicly held firm (one whose stock shares are traded on the stock exchange) that earned revenue worth $350 million and incurred land, labor, and debt costs worth $320 million. The stockholders who have invested a total of $100 million in this firm could have earned 10 percent return on other comparable investments.
-Irrespective of the market structure, a firm maximizes profit at the level of output where the price of its product equals its marginal cost.

Question

Quizplus · Accepted Answer

A firm maximizes profit where marginal cost equals marginal revenue, not necessarily where price equals marginal cost.

Scenario 9.2 Consider a Publicly Held Firm (One Whose Stock Shares Are