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Question
A perfectly competitive firm has the following cost schedule
Output (units) 0 1 2 3 4 5 6 7 8 9 10 MC(Rs.) - 11 10 9 8 7 6 7 10 13 19 TC(Rs.) 9 20 30 39 47 54 60 67 77 90 109
If the market price is Rs. 13, to maximize profits the firm should produce ___________.
A perfectly competitive firm has the following cost schedule
| Output (units) | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
| MC(Rs.) | - | 11 | 10 | 9 | 8 | 7 | 6 | 7 | 10 | 13 | 19 |
| TC(Rs.) | 9 | 20 | 30 | 39 | 47 | 54 | 60 | 67 | 77 | 90 | 109 |
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Solution
The correct option is D 9 units
Firm will operate at the point that MC =AR (price), to maximize profits in perfect competition.
Therefore, the firm will produce at output level 9 as MC =AR (price), ie 13
Firm will operate at the point that MC =AR (price), to maximize profits in perfect competition.
Therefore, the firm will produce at output level 9 as MC =AR (price), ie 13
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