Tag: How Perfectly Competitive Firms Make Output Decisions A perfectly competitive firm

How Perfectly Competitive Firms Make Output Decisions A perfectly competitive firm  has only one major decision to make—namely, what quantity to produce. To understand why this is so, consider a different way of writing out the basic definition of profit: Profit = Total Revenue – Total Cost = (Price)(Quantity Produced) – (Average Cost)(Quantity Produced) Since a perfectly…