Profit maximization for the Competitive firm. ●●● Costs The firm maximizes and profitby producing Revenue the quantity at which marginal cost equals MC marginalrevenue MC 2““……… ATC P=MR1 PEARE MR AVC MCI 0 Q ZMAX Q2 QuantityP=MR1 P = AR = MR MC 0 Quantity Costs and Revenue ATC AVC QMAX The firm maximizes profit by producing the quantity at which marginal cost equals marginal revenue. MC1 Q1 MC2 Q2 Profit Maximization for the Competitive Firm