If a perfectly competitive firm is producing 2,000 units and, at the 2,000th unit, the difference between marginal revenue and marginal cost (MR - MC)is zero, which of the following is true?

Question

Quizplus · Accepted Answer

At MR=MC, the firm is maximizing profit since it has found the quantity at which producing one more unit would result in a decrease in profit due to higher marginal cost. The firm should continue producing 2,000 units to maximize profit. Any changes in production beyond 2,000 units would result in lower profit.

If a Perfectly Competitive Firm Is Producing 2,000 Units And