Answer to Question #87392 in Microeconomics for Michael

Question

At what price should a firm produce to maximize profit in a perfectly competitive market

(1) where price equals marginal cost
(2) where price equals marginal revenue
(3) where price equals total revenue
(4) where price equals average revenue

(B) which of the following correctly characterises a perfectly competitive labour market?

(1) a large number of firms and a large number of workers
(2) imperfect information
(3) employees and employers having individual control over the market wage rate
(4) very few skilled workers

Answer 1

A.   Where price equals marginal cost.

B.    A large number of firms and a large number of workers.