If a perfectly competitive firm is producing a rate of output at which MC exceeds price,then the firm
A)Must have an economic loss.
B)Can increase its profit by increasing output.
C)Can increase its profit by decreasing output.

Question

Quizplus · Accepted Answer

If MC exceeds price, the firm is producing too much and can increase profit by reducing output until MC equals price.

If a Perfectly Competitive Firm Is Producing a Rate of Output