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Question
The accompanying table represents the quantity produced, the total revenue, and the total cost of a firm operating in a perfectly competitive market. Refer to this table to answer the following questions.
| Quantity | Total Revenue | Total Cost |
| 0 | $0 | $3 |
| 1 | $5 | $5 |
| 2 | $10 | $9 |
| 3 | $15 | $13 |
| 4 | $20 | $19 |
At what point does the profit-maximizing perfectly competitive firm produce?
a. where total revenue minus marginal revenue is at a maximum
b. where marginal revenue minus marginal cost is at a maximum
c. where total revenue minus total cost is at a minimum
d. where marginal revenue minus marginal cost is at a maximum
e. where marginal revenue is equal to marginal cost
Answer
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