When a profit-maximizing competitive firm finds itself minimizing losses because it is unable to carn a positive profit this task is accomplished by producing the quantity at which price is equal to
a. sunk cost.
b. average fixed cost
c. average variable cost.
d. marginal cost
Homework Answers
A perfectly competitive firm profit-maximizing condition are;
P=MC
Through this condition, cost minimizing quantity will be determined.
It means cost minimizing and profit-maximizing conditions are same.
Hence it can be said that cost minimizing condition will be accompolished when price is equal to MC.
Hence option d is the correct answer.
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