Please answer both of the following questions:
Homework Answers
11.
Since the profit maximizing condition of the perfectly competitive firm is
P=MR=MC
The profit-maximizing level of output for a perfectly competitive firm occurs where: marginal revenue = marginal cost.
Since in the perfect competition price line is demand curve hence
P=MR=MC=Demand curve.
Hence option second is the correct answer.
12.
Since the profit maximizing condition of the perfectly competitive firm is
P=MR=MC
Q=35
P=1300
ATC=1500
Loss=(P-ATC)Q
=(1300-1500)35
=-$7,000
Hence option second is the correct answer.
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