For both the monopolist and the perfectly competitive firm , profit maximizing output occurs at the point where the

Assessment: WAEC SSCE - Economics - 2004 (Objective) Subject: Economics

Question 1 Report

For both the monopolist and the perfectly competitive firm , profit maximizing output occurs at the point where the
Answer Details
Profit maximizing output for both the monopolist and the perfectly competitive firm occurs at the point where the marginal cost curve cuts the marginal revenue curve from below. In other words, the level of output where the additional cost of producing one more unit (marginal cost) is equal to the additional revenue earned from selling one more unit (marginal revenue). This is because at this point, the firm is producing the optimal quantity of goods that maximizes its profit.
Read lesson note on Theory Of Price Determination (WAEC)
Read lesson note on The Theory Of Price Determination (JAMB)
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