Refer to the diagram to the right which shows cost and deman

Refer to the diagram to the right which shows cost and demand curves facing a typical firm in a constant-cost perfectly competitive industry MC If the market price is $20, what is the firm\'s profit maximizing output? ATC AVC 20 MR O A. 750 OB. 1,800 O c. 1,350 O D. 1,100 750 1,100 1,350 1,800 Quantity

Solution

c. 1350

Equilibrium quantity is where P = MC of firm. At price of 20, quantity is 1350 units.