Asked by Thomas Ramirez on Jun 22, 2024
Verified
By comparing the marginal revenue and marginal cost from each unit produced, a firm in a competitive market can determine the profit-maximizing level of production.
Marginal Revenue
The additional income received from selling one more unit of a product or service.
Marginal Cost
The cost added by producing one additional unit of a product or service, a concept used in economics and financial management to analyze and make decisions.
- Uncover the means by which entities in competitive environments calculate the optimal production quantity for maximizing earnings.
- Apprehend the technique of heightening profits by engaging in marginal analysis within competitive domains.
Verified Answer
GA
GERALDINE ARANETAJun 25, 2024
Final Answer :
True
Explanation :
In a competitive market, a firm maximizes profit by producing up to the point where marginal revenue equals marginal cost. This principle helps the firm decide the optimal level of production to achieve maximum profitability.
Learning Objectives
- Uncover the means by which entities in competitive environments calculate the optimal production quantity for maximizing earnings.
- Apprehend the technique of heightening profits by engaging in marginal analysis within competitive domains.