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- Subject
- Costs , Supply And Perfect Competitioneconomics-mcqs › costs-supply-and-perfect-competition
- Published
- 2 Jun 2019
- Last updated
- 28 May 2026
At what point does a perfectly competitive firm achieve maximum profit through its production level?
Multiple choice question for Costs , Supply And Perfect Competition. Select an option, then review the explanation below.
Explanation
A competitive firm maximizes its profit by producing up to the output level where marginal cost equals marginal revenue. This is because producing beyond this point would increase costs more than revenue, while producing less would leave potential profit unearned.
More Costs , Supply And Perfect Competition MCQs
Practice related questions from the same subject.
- 1.In the context of a perfectly competitive firm, what represents its short-run supply curve and its long-run supply curve respectively?
- 2.Under what condition will a firm cease production and produce nothing in the short term?
- 3.In the short run, the average total cost is composed of which two components?
- 4.What is the relationship between marginal cost and average cost when the average cost is decreasing and when it is increasing?
- 5.What does it indicate when the long-run average cost curve slopes downward from left to right?