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Economic question please helppppp meeee

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If a firm operates in a perfectly competitive market and the market price is £0.20 per unit, what is the efficient profit maximizing quanity that this firm should produce?

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  1. where the mc for the last unit is .20 per unit.  In other words, a perfectly competitive firm produces up to the point where P=MC.


  2. profit maximizing out put is MC = MR and as in perfect competition P=MR=AR=D  so P=MC is also a profit maximizing condition

    hence the output where MC of the firm is 0.20 will be the profit maximizing out put

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