2007•Wolfram Demonstrations ProjectOpen access
Profit Maximization in Perfect Competition
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Abstract
A perfectly competitive firm with rising marginal costs maximizes profit by producing up until the point at which marginal cost is equal to marginal revenue. The marginal revenue for a perfectly competitive firm is the market price determined by the intersection of the supply and demand curves, as shown in the panel on the left. The panel on the right shows the orange price line intersecting the p