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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
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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

User Lupu Silviu
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1 vote

Answer:

Produce more widgets.

Step-by-step explanation:

Given the price charge by the competitive firm is = $15

The unit produced = 100

The marginal cost of the last unit = $12

The firm should produce more widget because in the competitive market the firm charge the price that is equal to MC. Moreover, in the given question the price is greater than the marginal cost. Therefore, the firm should produce more widgets in order to reach the condition “P=MC”.

User Albert Rothman
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