Answer: They are both right.
Explanation:
Firms in every market will always maximise profit where their Marginal Revenue equals Marginal Cost because at this point, resources are being fully utilized. This is therefore no different in a Perfectly competitive market so Skip is correct.
Peggy is also correct however because in a Perfectly Competitive market, the demand curve is perfectly elastic. This creates a situation where the Price, Marginal Revenue and Average Revenue are all the same and represent the demand curve as well.
With the Price being the same as the Marginal Revenue in a Perfectly competitive firm, that means that where the Price equals Marginal Cost is where the Marginal Revenue equals Marginal Cost as well so indeed perfectly competitive firms maximize profit where price equals marginal cost.
Answer:
Not produce any additional roast beef sandwich
Explanation:
Allocative efficiency is reached when the marginal benefit or producing one more unit of output equals the marginal cost.
Allocative efficiency - Marginal Benefit (MB) = Marginal Cost (MC)
For this local deli, producing one more roast beef sandwich has a marginal benefit of $2, and a marginal cost of $3, we have:
MB = MC
$2 = $3
For the local deli, in this situation there is no allocative efficiency because the marginal cost is higher than the marginal benefit, therefore, the firm should not produce any additional roast beef sandwiches.
Answer:
Quantity supplied will increase
Answer:
PMT = $3875.00
Explanation:
given data
annuity selling = $14,427.59
time = 4 year
interest rate = 5 %
solution
we get here annual annuity payment that is express as
PMT = 
..................................1
put here valuer and we get
PMT = 
solve it now and we get
PMT = $3875.00
so here value of the annual annuity payment (PMT) is $3875.00
