ABSTRACT
86This chapter explores the profit-maximizing level of inputs and outputs for a firm in a competitive industry. It defines and explains perfect competition and clarifies the economic approach of comparing benefits and costs in decision-making. Graphs explain the optimal level of inputs and outputs. This chapter emphasizes the intuitive appeal of profit maximization and the rationale for using profits and losses to help determine a firm’s break-even and shutdown points. It is a comprehensive treatment of the heart of microeconomics.
