A firm facing a price of $15 in a perfectly competitive market decides to produce 100...

A firm facing a price of $15 in a perfectly competitive market decides to produce 100 widgets. If its marginal cost of producing the last widget is $12 and it is seeking to maximize profit, the firm should

Question 9 options:

	shut down
	produce more widgets
	continue producing 100 widgets
	produce fewer widgets

Solutions

Expert Solution

Ans) the correct option is b) produce more widgets

In perfectly competitive market, P = MC

Since price is greater than MC so the firm should produce more output

Rahul Sunny answered 2 years ago

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