U.S. Economic Growth Slows Amid Tariff Pressures: A 2025 Outlook

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📉 U.S. Economic Growth Slows Amid Tariff Pressures: A 2025 Outlook As 2025 unfolds, the U.S. economy is showing signs of strain amid a global slowdown and heightened trade barriers. Here's a detailed look at the latest forecasts and implications based on insights from the OECD, Federal Reserve, and key market indicators . 📊 1. U.S. Growth Forecast Downgraded by OECD The Organisation for Economic Co-operation and Development (OECD) has revised the U.S. GDP growth forecast for 2025 to 1.6% , down from 2.8% in 2024 . The forecast for 2026 remains muted at 1.5% , reflecting persistent uncertainty driven by: Elevated trade barriers Reduced consumer spending power Sluggish business investment 💸 2. Tariffs Fueling Inflation & Trade Costs The average U.S. tariff rate has climbed to 15.4% , the highest level since 1938 . These tariffs have raised import costs, which are now being passed on to consumers: Projected consumer price inflation is expected to rise to...
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The profit-maximizing level of output for a perfectly competitive firm

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The profit-maximizing level of output for a perfectly competitive firm:A perfectly competitive firm is a price taker and has no control over the market price of the product it sells.

  • The firm's marginal revenue curve is perfectly horizontal and is equal to the market price.
  • The profit-maximizing level of output occurs where the firm's marginal revenue (MR) equals its marginal cost (MC).
  • If the marginal cost is less than the market price, the firm should produce more to earn a profit on each additional unit produced.
  • If the marginal cost is greater than the market price, the firm should produce less to avoid losing money on each additional unit produced.
  • The profit-maximizing level of output for a perfectly competitive firm occurs at the point where the marginal cost curve intersects the marginal revenue curve (which is perfectly horizontal and equal to the market price).
  • This level of output is also referred to as the efficient level of production, because it maximizes the firm's profit while minimizing the cost of production.
Let's say that a perfectly competitive firm produces and sells widgets in a market where the market price for a widget is $5. The firm's marginal cost to produce each widget is shown in the following table:


QuantityTotal CostMarginal Cost
1$5$5
2$8$3
3$11$3
4$15$4
5$20$5
6$26$6


To determine the profit-maximizing level of output, the firm needs to compare its marginal cost to the market price of $5.

At a quantity of 1, the marginal cost is equal to the market price of $5, so the firm should produce and sell this quantity.

At a quantity of 2, the marginal cost is less than the market price, so the firm should continue to produce and sell more widgets.

 At a quantity of 3, the marginal cost is still less than the market price, so the firm should continue to produce and sell more widgets.

 At a quantity of 4, the marginal cost is greater than the market price, so the firm should not produce and sell any more widgets beyond this point.

Therefore, the profit-maximizing level of output for this perfectly competitive firm is a quantity of 3 widgets, where the marginal cost is equal to the market price of $5. At this level of output, the firm will earn a profit on each additional widget produced and sold. Any production beyond this point would result in losses for the firm.

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