The optimal range of output for a perfectly competitive firm is

  • A AC is lowest
  • B AVC is lowest
  • C MC is rising
  • D MC is falling
jamb 2011economics

The correct answer is D. MC is falling

The key goal for a perfectly competitive firm in maximizing its profits is to calculate the optimal level of output at which its Marginal Cost (MC) = Market Price (P). Output will be optimal where MC is falling

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