Answer to Question #76948 in Microeconomics for Joy Mungai

Question

With relevant data explain how a firm maximises profits

Answer 1

A perfectly competitive firm maximizes profits producing such amount of output, for which market price equals marginal cost and marginal revenue (P = MC = MR).
Monopolistic and monopolistically competitive firms maximize profits producing such amount of output, for which marginal cost equals marginal revenue and set the price from the demand curve.