At what output level should a perfectly competitive firm choose to produce at?

Question

(1 point)
• The firm should choose to produce 1,500 units of output.
• The firm should choose to produce 800 units of output.
• The firm should choose to produce 1,200 units of output.

Answer 1

• The firm should choose to produce 1,200 units of output.

In a perfectly competitive market, a firm should choose to produce at the output level where marginal cost (MC) is equal to marginal revenue (MR), which occurs at the quantity where the two curves intersect. The profit-maximizing output level for a perfectly competitive firm is where MC=MR.