Asked by Anshul Suryavanshi on May 27, 2024
Verified
Price equals marginal cost is a sufficient condition for profit maximization.
Price Equals Marginal Cost
This principle suggests that in a competitive market, firms set prices equal to their marginal cost of production, achieving economic efficiency.
Profit Maximization
The process or strategy aimed at achieving the highest possible profit where total revenue exceeds total costs.
- Explore the mechanisms competitive firms employ to enhance profit maximization.
Verified Answer
DS
Doncarlus ScottMay 27, 2024
Final Answer :
False
Explanation :
Price equals marginal cost is a necessary condition for profit maximization in perfectly competitive markets, but not sufficient on its own because it does not ensure that total revenues exceed total costs.
Learning Objectives
- Explore the mechanisms competitive firms employ to enhance profit maximization.
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