Explain how, in economic theory, a firm in a perfectly competitive market determines the price and output that would maximize profit. [8 marks]
Chapter: Perfect Market Structure
For a perfectly competitive market structure, it is a theoretical concept that features perfect information and mobility of resources. Learn more about these characteristics of the market structure that will influence the production equilibrium, which determines the price and output decisions of the firm. This production equilibrium is affected by the notion of profit maximisation.
07 August 2018