To maximize economic profit, a competitive firm will produce a quantity where Group of answer choices marginal revenue = marginal cost. price = average cost. marginal revenue = average variable cost. average revenue = average total cost.

To maximize economic profit, a competitive firm will produce a quantity where Group of answer choices marginal revenue = marginal cost. price = average cost. marginal revenue = average variable cost. average revenue = average total cost.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Firms In Competitive Markets

Section: Chapter Questions

Problem 6PA: A firm in a competitive market receives 500 in total revenue and has marginal revenue of 10. What is...

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Question

To maximize economic profit, a competitive firm will produce a quantity where

Group of answer choices

marginal revenue = marginal cost.

price = average cost.

marginal revenue = average variable cost.

average revenue = average total cost.

Definition Definition Measure of the cost of production per unit of output, including only variable costs such as wages, materials, and utilities. AVC is calculated by dividing total variable cost by the number of units produced. Understanding average variable cost is important for businesses to make decisions on pricing, production levels, and profitability.

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