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Showing posts with the label The profit-maximizing level of output for a perfectly competitive firm

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...
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